By and large, equity indexes have treated the UK’s shock vote to exit the EU as a non-event, with markets that have the most at stake recovering all their lost ground and then some in the intervening weeks.
[Insert Second Article – FTSE 100 Index]
As we explained in Brexit: Will Cooler Heads Prevail?, the lackluster economic recovery means that investors should remain cautious when seeking opportunities in Europe and allocate their capital selectively. Uncertainty about the political and economic consequences of the UK exiting the EU likewise ratchets up the risk over the next few years.
In the UK, investors should continue to favor companies that generate a significant proportion of their revenue outside Britain and stand to benefit from further weakness in the pound.