Investing Lessons from Brexit

The impact of Britain’s vote to leave the EU may take years to play out, but there are several lessons investors can learn in the meantime. Daisy Maxey of The Wall Street Journal offers the opinions of some investment and behavioral-finance experts: Timing: A Loser’s Game Translating geopolitical uncertainty into potential market movements is very difficult because, according to William Bernstein, investment manager at Efficient Frontier Advisors in Eastford, Connecticut, “it can be highly counterintuitive. Just because economic growth will be slower/faster doesn’t mean that returns will be lower/higher.” Markets Bring Surprises “Markets are indeed human, and actions people take […]

Bryon Wien’s Sobering Thoughts on World Markets

“The ‘Leave’ outcome is a setback for growth in Britain, Europe and around the world at a time when economies are generally struggling. Not a good sign for markets for the rest of the year,” writes Blackstone strategist Byron Wien in a recent article for Barron’s. Wien references the opinion of Bard economic historian Walter Russell Mead, who believes that Brexit and nationalism are generally born of a “systemic crisis” related to: Economic vulnerability of the Eurozone; Middle East refugee crisis and fear of terrorism; Russian aggression. Wien visited Europe last month to meet with investors and discuss market uncertainty. […]

Bargain Shopping in Europe

When considering shopping for “cheap” stocks that have emerged post-Brexit, keep in mind that this group of stocks has offered bargains for quite some time. In a recent article for Forbes, John Reese, CEO of Validea, explains that while investing overseas may seem smart due to the current political and economic turmoil, investors may be better served by focusing on company-specific financials and fundamentals. Here are five European stocks that get high marks according to Validea’s Guru Stock Screener: Deutsche Telekom AG (DTEGY): communication services company that provides information technology and telecommunications services across Europe and mobile activities in the […]

Machine vs. Man — Algos the Winners Post Brexit

“The computers got it right and the humans got it wrong,” was the gist of last week’s Wall Street Journal article about attempts to capitalize on the Brexit vote. This was partly due, it said, to the fact that too many investors were prone to “projection bias”: that is, betting on what they wanted the outcome to be. A fund category sometimes referred to as commodity trading advisors (CTAs) uses trading algorithms to identify market trends and place bets on futures and other derivatives. Most of these models didn’t factor in the British election polls. Instead, in the weeks leading […]

New York Times Columnist Says Sit Tight After Brexit

As an investor, it’s not unusual to bristle when the stock market takes a dive then fight the impulse to cut and run. In the wake of Brexit, The New York Times “Your Money” columnist Ron Lieber offers the following words of wisdom: Your portfolio is probably made up of a diverse group of assets, so all of your eggs are not in the stock market basket. If you have been investing in a global stock portfolio in the last seven years, you have most likely made gains. When you invested in stocks, you knew there were risks and whatever […]