From Our Blog:


What happened?

On June 23, United Kingdom (UK) voters sent shockwaves through financial markets around the world by opting to leave the European Union (EU) by a 52% to 48% margin. The vote, commonly referred to as “Brexit” (by merging Britain and exit), sent the British Pound to a 31 year low versus the U.S. Dollar. Prime Minister David Cameron, who led the campaign to remain in the EU, announced his resignation and plans to step down in October.

The vote to leave sent investors fleeing as the S&P 500 fell over 110 points (-5.34%) by the time the stock market closed on Monday.

What is next?

For the UK to reclaim sovereignty from Europe it has to invoke an agreement called Article 50 of the Lisbon Treaty, which will start a two year period of negotiations on terms of withdrawal. We anticipate the departure to be a long and difficult process.

Will there be more to leave? The growing risk of fragmentation across the EU will continue to create political uncertainty and risk for European assets. Global markets may face additional volatility as the risk of a UK recession and further contagion is now elevated.

Our Investment Approach

For much of 2016, we have been recommending a more defensive posture across all investment strategies, which implies smaller allocations to stocks in favor of cash, bonds, and income oriented strategies. Heading into June, both the Fed’s indecisiveness and looming Brexit vote were further reasons to remain cautious.

And if the Fed and Brexit weren’t already enough to worry about, declining corporate profits in the U.S., conflict in the Middle East, global recessionary conditions, and even new concerns over further Chinese Yuan devaluation are all reasons to tread carefully this year.

We would like to remind investors to stay calm and not react emotionally to the market’s knee jerk reactions. If you are losing sleep over Brexit, it might be worth considering whether or not your investments appropriately match your risk tolerances.

If you would like to discuss your portfolio and whether it’s prepared for the potential volatility ahead, please contact GGM Wealth Advisors.
recession warning
Ryan Baldwin

Recession Warning: Are you Ready?

Financial markets continued their decline in the second quarter as both stocks and bonds remained volatile. The S&P 500 (equities) realized its worst first-half performance since 1970 (-20.0%) and the Bloomberg Barclays Aggregate Bond Index (fixed income) had its worst start to a year ever (-10.3%)! […]

Read More »
Investor Education
Steven Hannigan

Stablecoins – Not so Stable?

Cryptocurrency continues to make headlines, just not in the way we have become familiar with in the last year. As volatility in crypto assets has shown no signs of abating, crypto investors looked for other avenues to have exposure to a digital currency that could be more stable… enter Stablecoins. […]

Read More »
Investor Education
Steven Hannigan

5 Things you Need to Know About Elon Musk Buying Twitter

The whole world is buzzing, or tweeting, about Twitter as the recent news that Tesla CEO Elon Musk tendered a $44 Billion offer to buy the company, and the board of directors accepted the offer. So what happened, what happens next, and what happens to shareholders? First, let’s define a few key terms: […]

Read More »