What will happen to my investments after the referendum? and When should I get my Euros for my Summer Holiday?

What is really risky?

The News often seems to affect stock market returns and the Brexit referendum on 23rd June is no different to that. There is certainly a lot of news on this topic, and quite right too; it is important. But are we missing a bigger picture? Perhaps. Let's see…

There are daily changes to prices as the news announces which side is edging ahead, and we're seeing this most with currency. Up to now, every time we hear that the 'Leave' campaign has had a good day, £Sterling has weakened a bit.

What will the markets do?
What we know so far is that the stock market expects the decision to remain in the Euro. In other words, I expect the market to fall if we a vote to leave.

I don't really expect much of a market rise if we vote to stay. A bit, but not much. And perhaps not for long.

So should I sell up for a few weeks?
That might make me think that long-term investors should sell out until the trouble blows over, but I think it's safer to keep the long term goals in mind. There's a risk that short term distractions tempt us to miss the point a little.

There are always 'headwinds' - things that could make the markets suffer. The big difference about this referendum is that we've had weeks to know that it's coming up so some investors have time to wonder if they should get their money out.

That's understandable. We would all miss out on the worst losses if we could.

However, it is very difficult to avoid the worst losses, without also missing out on the best gains, since they both tend to happen on single days. I've been watching for a couple of decades now, and I'm still looking for proof that selling up for the short term really works.

What about my holiday spending money?
If the news tells you that Sterling has weakened against the Euro, or against the Dollar, then you'll get fewer Euros or Dollars for each £pound Sterling you have to spend on them.

Right now, 1 Euro costs about 80p.
If you picked the best day (19th July last year) it would have only cost about 70p.

So, based on the last few weeks, it might be worth thinking about getting your Euros before the referendum, especially if you're travelling soon afterwards, and especially if you expect us to vote to 'Leave'.

Of course, none of us know what will happen. This is my opinion, not personal advice.