The UK stunned the market and voted to leave the EU and sent markets on a wild ride to end June. This article from the Motley Fool does a great job of capturing our thoughts in the immediate aftermath of the referendum.
When negative shocks hit global stock markets we are not looking to sell and get out. We are looking to potentially buy in, by selling other areas of the portfolio that are likely performing well as a result of the news, like high quality fixed income.
The chart at the end of the article really speaks to our strategy. There have been many negative events that have happened over the years, but the market has continually powered through. We believe that if you diversify your portfolio and exhibit the discipline to stick with equities that over time you will be rewarded.
Index Performance June 2Q YTD Trl 1 Yr
US Stock (Russell 3000) 0.21% 2.63% 3.62% 2.14%
Foreign Stock (FTSE AW ex US) -1.48% -0.35% -0.71% -9.47%
Total US Bond Mkt. (BarCap Aggregate) 1.80% 2.21% 5.31% 6.00%
Short US Gov. Bonds (BarCap Gov 1-5 Yr) 0.96% 0.80% 2.36% 2.39%
Municipal Bonds (BarCap 1-10yr Muni) 0.99% 1.44% 2.70% 4.88%
Cash (ML 3Month T-Bill) 0.04% 0.07% 0.15% 0.19%
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