Wealth Management Strategies, Inc.®

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If a Pebble Fell in a Pool...

...Would you even notice? 

The captain is supposed to be the first person to board his ship and the last to disembark. When the ship is the 5th largest economy in the world (Great Britain) and the captain (the prime minister) is the first to leave, its passengers (the citizens) can become understandably distressed. Such is the case with Brexit, Prime Minister David Cameron, and much of the developed world. To compound matters, “Brexit” as a term, feels a lot like “Obamacare” in early-2013. It blankets headlines and the general sentiment seems to be one of concern, but nobody quite knows what its impact will be. So between abandonment and uncertainty sits us, the people of the world. And here we are, watching the ship, unsure about what it will leave in its wake. That doesn’t sound like a comfortable seat, does it?

After the United Kingdom voted to secede from the European Union on June 24th, soon-to-be-former-British Prime Minister David Cameron promptly announced his resignation. At first glance, it seemed like Mr. Cameron walked away due to a difference of opinion between himself and a political party in his country. However, as details emerge about the implementation of Brexit, it appears he jumped off a ship that had neither a destination nor a map. It’s as if Cameron’s resignation indicated Brexit could negatively shift the tides of our global society, but we don’t know how, when, or if it will even come to fruition.

Brexit’s objectives and implications are vague, so it would be imprudent to begin making any recommendations besides, ‘ignore it’.  Our goal is not to be trite, it’s really the only advice we can sensibly give and we feel comfortable doing so, because you’re protected. When you begin to feel anxious or uncertain, like all of us do, remind yourself that the speculative and worrisome headlines are not tied to you. These opinions are meant for a mass audience, not just you as an individual.

At Wealth Management Strategies, Inc., the average portfolio has more than 12,000 companies in 11 different sectors, in 24 countries. When an event like Brexit occurs, you’re likely to see the effect, but so minimally, you wouldn’t notice if it weren’t for the news. Of course, when your portfolio spans this many countries and sectors, it’s almost impossible to not be in an affected region; call it the price of doing business. However, the impact is dulled when you have a portfolio filled with so many other companies and countries that are thriving.

Imagine a pebble falls into a 1oz shot glass. Chances are you’re going to notice and it will be a disruption. But if that same pebble falls in a swimming pool, there’s a much stronger chance you will never know it was ever there. We diversify your portfolio so extensively, because we don’t want you to be bothered with pebbles in a shot glass, we want you to enjoy your days in the pool.

Now, what about Mr. Cameron? In effect, Cameron liquidated his political portfolio after the Brexit vote. The difference is that his political portfolio wasn’t diversified across dozens of countries. Instead, his portfolio was a 1oz shot glass full of the 5th largest economy (as measured by gross domestic product) in the world: the United Kingdom. He chose to “sell”, because his individual plan warranted the choice, which takes us back to a recurring theme.

Good and bad events happen every day. Too often, the uncertain (disguised as the bad) overshadows the good, making us feel compelled to initiate a change in our own lives. Sometimes those changes are warranted, but when they involve your money, base your choice on YOUR plan. As far as your money is concerned, your plan is the only headline worth reading.