Remember Brexit?

By: Mike Earl

It is hard to remember the event as vividly now, but when the United Kingdom voted to leave the EU on June 23rd, the nonstop news cycle said Brexit was a really big deal. In the course of just two days, pundits cried out that trillions of dollars were "lost" in global stock markets. The S&P 500 Index tumbled more than 5% in those two days. 

Thanks but no thanks, CNBC.

While Brexit led to a painful couple of days, we at The Wealth Group knew all along that declines like those are a normal feature (or should I say bug?) of how markets work. Inevitably, each year will present its own set of crises. When news anchors said $3 trillion was "lost" over those days in June, it makes me want to ask each one of them today: where are those 3 trillion dollars now? Have they been found?

Of course those dollars have been found, because the S&P 500 Index has now rallied more than 9% off the Brexit lows. 

Below is a chart to help you stay the course as an investor. JPMorgan reports that "Despite average intra-year drops of 14.2%, annual returns positive in 27 of 36 years." Put simply, there is going to be some pain during an average year of investing in stocks. However, the long-term rewards make the risk along the way worth taking.

Views expressed are the current opinion of the author and are subject to change without notice. Opinions expressed are not necessarily those of Raymond James. Information contained in this report was received from sources believed to be reliable, but accuracy is not guaranteed. Past performance is not indicative of future results. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success. The S&P 500 is an unmanaged index of 500 widely held stocks.