Mailiard-v1-WEBWill the outcome impact your portfolio?

The British referendum on whether to stay in or leave the European Union (EU) has been called the most important vote in Europe in more than 50 years. The EU is an economic and political organization of 28 mostly European member states. Britain’s potential exit from the group (dubbed “Brexit” by the media) has been fiercely debated.

Those in favor of the exit believe the EU impinges on British national sovereignty and stifles the UK economy with excessive regulation and other costs of billions of pounds per year. Those opposed to the exit argue the alliance makes trade, finance and other business activity easier among EU nations.

The EU accounts for 25 percent of global gross domestic product (GDP) and is the UK’s largest trading partner. Brexit opponents say trade barriers are likely to rise after exit. As a result, as economics writer Robert Samuleson bluntly puts it, “Leaving the EU would be an act of national insanity.”

Not surprisingly, the pro-exit side believes strongly the opposite is true. Patrick Minford, former economics advisor to British Prime Minister Margaret Thatcher, asserts leaving the EU would be “entirely positive,” as “Britain would no longer have to put up with millions of costly and often idiotic regulations.”

So, another potential “crisis” grabs headlines, as they always have and always will. What’s an investor to do? As Perspective clients know, the answer is to follow a written, disciplined plan aligned with one’s needs and tolerance for risk. With more than half the world-equities markets outside the United States, despite the cycle of international uncertainty, that plan will almost always call for a broadly and indeed globally diversified portfolio.