EDITOR'S LETTERMerryn Somerset Webb
There are exciting times ahead
One of the press releases I got this week on the Brexit vote accused the UK of “democratic hooliganism.” Of engineering a situation that has crashed our own currency and stock markets; put the entire EU at risk; and shattered the stability of our own political system. I don’t buy it. As John Stepek explains, the stockmarket hasn’t crashed: no more was “wiped off” stocks yesterday than was “wiped on” last week when markets decided that the UK was going to vote Remain. There is no crisis here.
Still that doesn’t mean things haven’t changed. Of course they have. On Thursday, it looked as though we had many, many years of bickering with the EU about their endless failure to reform in a way that suits us ahead. Today we just have two to four years of boring negotiations ahead. How will they end? That we can’t know – for the simple reason that we don’t know who will be running them. Our prime minister has resigned. His replacement may well want to be sure he has a proper mandate to negotiate on our behalf. So he may well want to call a general election to get it. That means that right now we don’t know who our new leader will be – or which party he will be leading. Both things will make a difference.
The good news is that this week’s Brexit comes with almost endless possibility and opportunity. I look at the kind of deal we might come to with the EU (as all the politicians I have spoken to today agree, “anything is possible”). Matthew Partridge looks at how we find out who our new boss is to be. And John looks at what more loose monetary policy might do for your portfolio and at some of the things you might want to buy to make the most of it. The value of an equity isn’t based on the profits it might make over one year or two years but over those it will make over many years. An equity is a long duration investment. Something to remember when all those around you are losing their heads.
We have written an awful lot about the EU referendum over the last year. We hoped for a Leave vote. And we are thrilled to have it. There are exciting times ahead. There’ll be more on all this in the full magazine next week but we hope you enjoy this shorter referendum special.