An historical night in the United Kingdom sees Britain now become the first country to leave the European Union. In wake of the decision, there could be major economic impacts.
Britain shocked the world with its vote, but markets are bloodied amid the decision, the TSX fell nearly 240 points Friday and the Canadian Dollar down to just below 77 cents to its U.S. counterpart.
Canada exported nearly 16 billion dollars worth of products to the U.K. in 2015 according to Statistics Canada. About 20 billion dollars of the plans assets are in the U.K. according to the CPP Investment Board.
Financial Advisor with Raymond James, Rebecca Sinclair says pensions won’t be affected too much. “The central banks and all of the people involved will come up with strategies to make it go as simple as possible or smoothly as possible and the pensions being so huge and so well managed and so large and very well-diversified, won’t have a very huge affect.”
When it comes to RRSPs, it all depends on what sort of risk tolerance is present. Sinclair says short term uncertainty can actually be a great opportunity, especially with skyrocketing metal and gold stocks. “Because of the uncertainty money is rushing into safety right, so if it’s no longer high risk or no longer appropriate for the clients portfolio, I can get rid of that at a profit for them.”
Financial advisors also says there are a number of mutual fund options you can invest in that will mind the volatility of the markets. If you’re in a basic balance fund, you may see a drop by your month end statement. As for any drastic result, Sinclair says there will be no drastic result unless other countries struggling in Europe decide to have referendums and vote on exiting the European Union as well.