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A SURPRISE “YES” VOTE FOR BREXIT The potential for a “Brexit” event has been


looming for months, with the final vote for Britain to either stay or exit the European Union (EU) happening on June 23rd. Weeks ago it was widely expected that Britain would vote to stay in the EU. Many economists and large investment managers warned that if Britain left the EU there would be numerous areas that would suffer negative financial consequences. Primarily equity markets, the British Pound, and Emerging Market currencies would likely witness declines of unknown amounts if a Brexit happened. But, it should be stressed that there was a very low likelihood of this occurring. It now appears that something which seemed, until recently, very unlikely will happen. The question to answer now is how will a Brexit impact events going forward.


For Europe and most notably Britain, Brexit


will mean a reduction in Eurozone GDP growth rates. Some large economies in Europe have


projected that a Brexit will shave 1% to 1.5% from their GDP rates. These reduced growth rates are on top of an already sluggish Eurozone economy. Also, as a general rule volatility is negative for both economic growth and financial markets. One positive factor is the EU does have legislation in place for a member nation to leave their economic union, but it will be the first time that this mechanism is tested. The biggest worry now for the EU is will other member nations seek to leave as did Britain. There are many unknown factors that will clearly be a net negative for the EU and many are predicting a hard road ahead for Britain both economically and politically in the years that follow.


In the short-term these events can be unsettling


but as an investor it is important to focus on long- term objectives.


For an honest opinion about how to position your portfolio we are here to help.


Call Kurt at Andorra Investment Management to discuss these strategies for 2016 www.ai-mgmt.com • 562 - 433 - 1400 •


kurt@ai-mgmt.com 5941 Naples Plaza Long Beach, CA 90803


The information above shall not be used as financial advice. It is intended as general information only. Always consult a financial advisor when considering different investment strategies.


18 • August 2016


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