Brexit, the nickname of the British vote to leave the European Union, resulted in a significant amount of anxiety across the pond and here at home in the United States.
The United Kingdom’s vote in favor of leaving the EU threw the stock market into a tailspin, had individuals in the financial industry running for cover, and those who have invested in the markets scurrying for more information as to how Britain’s exit will impact their 401k plans going forward.
America’s Wealth Coach Deborah Owens stopped by NewsOne Now to discuss how Britain’s exit will impact Blacks and the U.S. economy and your pocket.
Owens, who considers problems potential opportunities, said, “What I want our viewers to understand is you don’t need to react to short-term volatility” in the markets.
“If you consider the amount of political unrest, changes in the financial markets themselves, there’s always going to be some sort of volatility,” said Owens. She continued: “Get used to this new financial normal of volatility and keep your eye on your pocketbook and understand what your goals are and stick to it.”
Owens added that those who have invested in the financial markets should not allow themselves to react to “short-term movements in the financial markets.”
The financial guru offered a few tips on how to ward off the anxiety of fluctuations in the market with the following list:
- Don’t panic
- Increase your financial acumen
- Put different eggs in different baskets
- Diversity within the asset classes
When asked why Brexit has caused values of 401k plans to fluctuate, Owens said, “If you are invested in mutual funds, your investments in some cases might have an international component.”
Owens also highlighted many companies in the United States are multi-national, “so their revenue are coming from some of these other countries.”
Owens offered the caveat, “Most Americans have less than thirty percent of their investment in international – most advisors recommend no more than ten percent of your portfolio” is tied to foreign investment.
The Brexit situation still needs to unravel, “But the fact is for the average person investing in their 401k, the best thing they can do is stay diversified and keep their eye on the long-term so that in the long-term, they don’t react to what are just short-term machinations in the market.”
Watch America’s Wealth Coach Deborah Owens, guest host Laura Coates, and the NewsOne Now panel discuss the Brexit in the video clip above.
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PHOTO CREDIT: Getty