Whether you’re an arms aloft ‘Brexiteer’ or a hands in pockets ‘Remainer’, the UK’s impending withdrawal from the EU is causing a significant amount of economic uncertainty, which is seldom a good thing for those of us with healthy investment portfolios to protect. However, there are ways to insulate your portfolio from the chaos and to even potentially profit from the increased economic volatility that is building to an unavoidable apex on March 29.
Hedging against the pound (GBP)
Even hardline Brexit backers would struggle to deny that the referendum result in 2016 wreaked havoc on the value of the good old British pound. Indeed, following the announcement, the GDP sunk to a 30-year low. With all signs currently pointing towards a no-deal Brexit, it would be wise for investors to refrain from backing the pound.
Know your industries
Not all industries will be hit hard by Brexit and even with those that are affected, some will be affected more significantly than others. This is vital for investors to take into account, particularly those that trade in commodities and stocks. Examine your portfolio and restructure it where necessary, prioritising areas that are more likely to thrive during and after Brexit. Working with an investment management firm should help you get a more solid idea of which industries to focus on.
Invest in security
In the increasingly likely scenario of a no-deal Brexit, it’s not only the UK that will suffer but also EU member states and even nations further afield due to added supply chain complications. In such globally austere economic times, more secure and tangible stores of wealth always increase in value. Gold is always a solid investment (no pun intended).
Diversification
There is never a bad time to diversify your portfolio, but with Brexit on the horizon, there has also never been a better time to do so. Spread your investments across more eclectic areas and when one area performs poorly, another should pick up the slack.
Go international
If most of your investments are based in the UK, consider setting your sights further afield. Of course, it can feel natural to stick to what you know, but if you look past the brands you recognise to international names and opportunities you might be surprised what you find.
Grab a bargain
Of course, it could be argued that British funds and shares will currently be in the ‘bargain bin’ and could bounce back if Brexit proves to be successful. However, this is a risky tactic, to say the least, as most financial experts agree that Brexit will prove to be a financial failure for the UK.
Photograph by Alexas Photos