Brexit is good for Britain and investors alike.

November 17, 2016
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By Prashanth Prabhu

I sincerely think that in the long term, Brexit will turn out to be a good move for Britain.  And I make this judgment after spending numerous hours on the subject. I do not see a need for a union or trade barriers in today’s connected economy. Countries and businesses should be allowed to trade freely which would in turn give rise to intense competition and I think it is good to have competition to bring the best out in us.

Common sense says that the following events are likely to happen:

1. The official start of Britain exiting EU: This would start early next year and during this time I do not see any major calamity as the markets and currencies have already reacted to the news. Mostly fear and sentiments have driven both these to the bottom. I see great opportunity to buy Pounds over the next 3 months or so. I cannot say this will be the lowest the currency will see but this is certainly the closest opportunity one can get in the near future. For investors, distressed prices of equity, currency and real estate, all present a great opportunity.

2. The months through the second half of 2017: The idea would have sunk in by then. Companies would by then be working on their strategy to insulate the possible effect on their businesses within the European Union (EU) and Great Britain. During this time the currency markets would stabilise and things may seem like they are coming back to normal.

3. EU will make some noise: The fact that Great Britain has exited EU and by the looks of it the exit seems good for the country is dangerous for EU as other countries could try and follow. This may give rise to scare tactics in the market. Such reactions will make the markets and currency take some note and a few trailers of the flash crashes could be seen (again an opportunity).

4. Two years from 2017: By this time Great Britain would have started working independently with countries  on their treaties and life should be back to normal. From this point on you will see a steady rise in the economic activity (which at the time of writing this hasn’t changed as expected by many).

In effect, all that is seen and done as of now is based on fear and sentiments and it has been proven that life comes to normalcy at the end of it. What matters to the success or downfall of a company or a country is in its own hands and the hands of its people. Countries like Switzerland and Norway are doing great outside EU and I don’t see a reason why Great Britain cannot.


To get in touch with the author, write to him at prashanth@29kadvisers.com. To know more about investing in real estate in the UK, register for an appointment here.