Why you should stay calm as Brexit roils markets

Financial advisers pressed the 'keep calm and carry on' message to clients Friday as the global markets reacted wildly to the United Kingdom's surprising vote to leave the European Union after 43 years. “We are explaining to clients that we were prepared in advance with an investment strategy that did not depend on us guessing correctly one way or the other for Brexit, or any of the other big events upcoming this year,” said Ted Halpern, president of Halpern Financial. Without trying to make light of the Brexit vote that caused a sell-off in U.S. and other markets on Friday, Mr. Halpern suggested investors consider a leisure trip across the pond. “After all, your dollar will go much farther now with declines in the British Pound,” he wrote in an email to clients on Friday. Advisers said investors seemed interested in the events occurring overseas and appreciated the communications. Some were resigned to the hit their investments may take and others asked about buying opportunities. “Thank you for the note,” one client emailed in response to an email from Dave Yeske, managing director of Yeske Buie, early on Friday morning. “I agree of course with staying the course. In fact, I would be interested in your take on when it would be appropriate to buy a bit more, and if so, how we do that?” Mr. Yeske said he responded to his first email about the Brexit vote at 2:20 a.m. ET, calming a client who was nervous about the impact on her 401(k) investments. He sent out a note to all clients a few hours later suggesting the market reactions over the next week should not be extrapolated far into the future. News that 52% of Great Britain's public chose to leave the European Union, and the announcement soon after the vote that Prime Minister David Cameron will step down, shocked many who believed polls that suggested a majority of the British public would vote “Remain.” Markets on Friday showed again that they don't appreciate surprises. As of noon ET, the Dow Jones Industrial Average had fallen nearly 500 points, or about 3%. The FTSE 100, an index of British blue-chips, initially fell 4% on Friday but closed the day down about 2%. Advisers emailed with clients throughout the day to warn of the markets' reaction, urging them not to be alarmed. “Clients are not unreasonably concerned about Britain leaving the EU,” said Mark Snyder, an adviser with an eponymous advisory firm. “But we cautioned against any over-reaction and not to react to what's likely to be short-term volatility.” RegentAtlantic's investment team was up at 4:30 a.m. ET on Friday working on its communication to clients, and it prepped advisers with talking points in advance of Thursday's vote, said Chris Cordaro, managing partner. The firm told clients before the markets opened on Friday that “trying to trade in extremely volatile markets is very dangerous.” Rose Swanger, principal at Advise Financial, said she reached out to clients prior to the vote. “If they have newly contributed IRA money, they might get a second chance to do some bargain hunting in case they missed the February dip,” she said. “And here it is. I want to emphasize it is not market timing, but taking the best opportunity for one's investment."