Brexit hit the market pretty hard yesterday. For people like me who invest in index funds (i.e. for the vast majority in US companies) but use the Japanese Yen as their target (I plan to move back to Japan for my Early Retirement), then the shock is twice as big: The Yen climbed something like 5% overnight, while stocks fell about 3%. The two effects combine for a devastating result on my wealth and my FI target.
OK, everyone was expecting the “remain” to win, so this was a shock to the market alright, but was that really worth a 3% decline in the US?
This is the thing that drives me mad about globalization: a bunch of people vote for something in the UK, and this ends up impacting me and my life directly. A French dude living in the US with a plan to go to Japan. What a mess. I cynically appreciate the irony of this vote supposed to “disengage” the UK from Europe, impacting pretty much all markets over the world.
What now? With the markets down 3%, I wish I had some spare cash to invest. I’m pretty sure everyone’s overreacting right now, and things will be back up pretty soon. Heck, it might be the “last correction” my portfolio’s been waiting for, the one that will lead to a huge boost to my investments and take me to FI faster than I want?
Would it be a good time for me to rebalance? I can see that my share of Bonds is a bit above what it should be. Maybe I could sell some of that to buy some of the beaten down stocks?
What’s your strategy after Brexit? Are you buying more and seizing the opportunity?