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How to Invest Post-Brexit

Brexit is real. What should you do with your money now?

Before the EU referendum I wrote How To Invest for Brexit. Let's look at how those predictions did, then work on what to do next, now that we're going to be out of the EU.

I said three things:

  • Do not buy or sell any specific stocks
  • Maintain a well diversified position
  • Put your money in many countries, sectors and asset classes

What happened?

Specific Stocks

Here's a heat map of all the biggest losers (red) and winners (blue) of the FTSE 100 on the day of the results. The top 100 UK companies:

Image source: Hargreaves Lansdown

Had you held shares in specific UK companies chances are you would have lost money. The biggest losers were property companies including Persimmon (-26.36%), Taylor Wimpey (-24.59%) and Barratt Developments (-23.63%).

There were only two big winners, both of whom sell gold and silver: Randgold Resources (+19.98%) and Fesnillo (+13.48%).

Diversified Positions

Had you held a more diversified position, for example through an index fund, you would have fared better. However, if you had only invested in a UK index fund, such as the FTSE 100, you would still have lost money, albeit less.

Image source: Google Finance

The FTSE 100 (the average value of the top 100 UK companies listed) dropped -3.33%. Potentially a smaller loss than if you had held specific stocks, but still a loss. Which is why I said...

Many countries, sectors and asset classes

I recommended spreading your money in more than just the FTSE 100, and putting it into many countries, sectors and asset classes.

Image source: Hargreaves Lansdown

I mentioned the Vanguard LifeStrategy 80% equity fund (available through Hargreaves Lansdown) and this actually increased in value by 0.55%.

Had you maintained a super-diversified position, your portfolio would actually be worth more.

How to invest post-Brexit

What should you do with your money now?

I wrote in my #1 Amazon best seller, Money's Big Secret, that possibly the worst thing you could do during a recession or financial crisis is pull all your money out.

If you do, you will sell at the lowest point and lose on any gains you would have made.

You should instead keep investing regularly over time into a more diversified portfolio. Again, that means many countries, many sectors and many asset classes.

The simplest way to do that is to set up a monthly direct debit with, or through Hargreaves Lansdown into something like the Vanguard LifeStrategy funds.

Tom Church is author of #1 Amazon Best Seller, Money's Big Secret and life hacking blogger.