When the UK’s decision to leave the EU was first announced, it caused a great amount of political and economic turmoil.
In the first few weeks especially, we saw a great amount of market uncertainty and kneejerk reaction from companies and investors alike. Although market uncertainty still remains as we’re unsure what Brexit will look like, and it remains unclear when Article 50 will be triggered, the markets have calmed somewhat. So, with this in mind, what are the ramifications of this and can Brexit (and the current state of the markets), impact on your personal finances? In this post, we aim to find out.
What the markets look like now
As mentioned, the markets have calmed since the announcement, and many of the “doomsday scenarios” that were mentioned by remain campaigners prior to the vote appear to have been misplaced. However, having said that, the overall outlook for the UK’s economy remains far from rosy.
For example, the pound is still down from where it was before the vote occurred, particularly against the backdrop of the resurgent dollar. As a result, we’ve seen a lack of major investments from big businesses in London and continual reminders for people to tighten their belts. This is because the markets are still plagued by uncertainty. We’re still unsure what Brexit will look like and we’re also unsure when Article 50 will be called, as a bill is yet to pass the House of Lords. So, until we know exactly what form of Brexit the government will go for (which will be revealed over the next two years or so) and we know when Article 50 will be enacted (Theresa May is hoping this will be before the end of March), we expect the markets to remain uncertain.
However, this doesn’t mean that you’re entirely restricted by the market. Let’s take a look at how you can get round this uncertainty and use Brexit as a way of helping your personal finances.
How can I get round this uncertainty?
Solidify your savings
The current state of the markets provides you with the ideal opportunity for you to solidify your savings and create the perfect platform for when the markets bounce back. Too many people are guilty of overstretching their finances during economic downturns, causing them to have to severely tighten the purse strings.
The reality is that there’s no real need to overstretch yourself. After all, good ISA rates are currently available, and the government is about to launch a new help to buy scheme to help first time property owners. ISAs and traditional savings accounts may be a little boring, but they provide guaranteed returns in uncertain times.
Consider bold strategies
However, that’s not to say that bold strategies cannot provide good (if not excellent) returns. Some sectors thrive in times of economic strife, and there are serious gains to be made, particularly in America where Wall Street continues to act incredibly favourably towards a Trump presidency.
The spike across the Atlantic means that one particular form of investment may be attractive – forex trading. This is because, in uncertain times like these (with greater uncertainty expected after Article 50 is triggered), we’re likely to see a large amount of currency price fluctuations. It’s a bold and very high risk strategy, so be sure do you your research before you commit. Online brokers such as FxPro can help provide you with demo accounts to start with if you’re interested but don’t want to risk capital.
To conclude, the markets are uncertain and turbulent due to Brexit, but this doesn’t mean that the situation can’t help with your finances. Solidifying your savings and investing in ISAs is the safest investment you can make, but bolder strategies such as investing in forex can be successful too, even if there is a great deal of risk involved. Plan your investments carefully and choose the option that’s best for you.