A Guide To Securing Investments In The Case Of ‘Brexit’
The Brexit referendum is slowly looming and this is causing a great deal of concern among all individuals, particularly investors. To ensure their investments are relatively secure should the Brexit vote result in Britain leaving the EU; investors are considering a development of secure investment portfolios. Initial reverberations in currency markets and key indexes will be inevitability if Brexit occurs with FTSE 250 and local businesses being most affected. Government bonds within the UK could also be influenced by a mass loss of international investors, which may cripple the currency markets. Yet, it may be possible to reverse these consequences and, if Britain opts to remain in the EU, it is possible that the Sterling will increase in value.
Irrespective of the final outcome, the primary factor to consider as an investor is that you have a portfolio protecting your investment capital. By investing in companies exporting outside of Europe, and who are more likely to avoid any market swings caused by Brexit, you will be ensuring a solid safeguard and reduced risk to your assets.
Another technique which could be employed to safeguard capital and diversify risk is to shorting the prices of firms that may suffer severely as a result of Brexit. This is, of course, only an option if you choose to spread bet on the currency markets. The most common firms that could be examined are those that specialize in property building and materials. The automotive industry may also be worth considering as changes will occur due to fuel costs being raised and increased taxes with individuals using current cars instead of upgrading. UK-based automotive firms, such as Vauxhall, have already speculated about the viability of continuing construction of offices within the UK pending the referendum. Keeping this in mind, it may be beneficial to short some of these stocks and enjoy some possible strong returns.
One must question what will become of those individuals who own property outside of the UK or who are expatriates? If Britain opts to leave the EU, it could mean a plethora of problems for these individuals beginning with reduced rates for the EEA pension applicants through to raise national taxes on properties with chaotic currency swings regarding income.
The final point is that all of these issues cannot be completely discussed or resolved until the referendum is complete and the vote has been cast. Furthermore, while you can invest additional capital on the market to develop a portfolio, the repercussions are yet undetermined and can only be speculative. However, analysts are placing their discussions on examples from the Scottish referendum to evidence how markets react and recover after voting. The most recent polls indicating a close call, similar to the YouGov poll completed before the Scottish Independence call, with the chance of a ‘stay’ vote are as high and will boost the value of the sterling.