The results of the 2016 Brexit referendum came as a shock for many, and six years later, we’re still adjusting to life outside of the European Union, with the global pandemic haven thrown a further curve ball into the mix and making for the kind of transition period few could have predicted.
Thanks to the ongoing global uncertainty, it’s been a tricky time for investors, and with the worldwide economy still in a precarious position, it’s difficult to know which opportunities are worth ploughing our cash into, and which are best avoided.
Cryptocurrencies are one of the few assets that continue to put on a promising performance, and with a growing number of new sign ups to trading apps and websites, even inexperienced traders are eager to learn the ropes in order to capitalise on the decentralised digital currencies the whole world seems to be talking about. But just this week, Bitcoin – the world’s largest cryptocurrency by market share – took a dramatic tumble, settling briefly at a three-month low of $33,000 and leading to much speculation as to whether it would be able to bounce back.
Market volatility is common with cryptocurrencies, and die-hard investors, rather than being put off by price tumbles, largely look to take advantage of the opportunity to buy cheap, instead. Crypto investment, you see, is about playing the long game, and those who have been doing just that for the past few years have reaped the benefits. But is this the only way to leverage the current economic climate for financial gains?
According to the experts at Brexit Millionaire, there are several ways investors can take advantage of the post-Brexit situation – as well as some key lessons we can learn from the entire process.
Play the long game
Just like with cryptocurrency, the key to successful investing is being prepared to play the long game – and this is particularly true at the moment. The FTSE 100 index has been very unpredictable since Brexit, and combined with the onset of the pandemic, it has been difficult to stay ahead of the game. Since the 2016 referendum, the UK stock market has fallen behind other big world markets like Europe and the US, but eventually, we can expect to see it bounce back. So, taking advantage of low stock prices at the moment could see you stand to make a considerable profit later down the line – if you can manage to grit your teeth in the meantime and wait it out.
Understand the factors at play
While Brexit has undoubtedly played a part in dictating the performance of the UK stock market, it isn’t the only one, and the pandemic has seen share prices in sectors like travel tumble dramatically over the past two years. While they have since begun to recover, inflation and the Russia-Ukraine conflict have further complicated the picture, and with speculation that China could be set to invade Taiwan, the economic certainty is continuing across the board.
The stock market is fickle, and easily influenced by world events and news, with even something as simple as a tweet from Elon Musk having the power to send a particular asset price soaring or plunging. It’s something we’ve seen happen already with cryptocurrency Dogecoin – so be aware that there are always many factors at play when it comes to market performance, and that while one global event might send prices in some sectors into freefall, others might have the opposite effect.
Don’t be put off by the plunging pound
When it comes to uncertainty, the British pound – or Sterling, as it is often referred to – has suffered greatly as a result of Brexit, but nevertheless, a weaker pound doesn’t have to spell disaster for the stock market. Many of the nation’s largest FTSE 100-listed multinationals make a fair amount of their money overseas, which means a poorer exchange rate can actually be a good thing in some cases and serve to boost profits in sterling. Of course, the same can also be true in reverse, so the performance of the pound is always something to keep abreast of. But think outside the box, and look at the wider global picture, and you’ll be able to spot opportunities, not just challenges.
Diversify, diversify, diversify
Diversifying your investment portfolio is one of the most important tips to implement in the current economic climate – but it’s also a general rule of thumb for traders looking to make a profit in the long term. If one of your assets should suffer due to global events and market fluctuations, it’s likely that another could benefit, thus protecting your investment capital a little more robustly – and by diversifying your investments across different geographical parts of the world as well as across different types of stocks and shares, the peaks and troughs brought on by Brexit should hopefully have only minimal impact on your fortune overall.
Disclaimer: Investing money carries risk, do so at your own risk and we advise people to never invest more money than they can afford to lose and to seek professional advice before doing so.