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Keep Calm and Carry On

David DeBellis, CFA &Portfolio Manager
July 2016

These now famous words were first printed on posters by the Ministry of Information as a way of boosting the morale of the British people during World War II. With the now in-famous “Brexit” vote behind us, investors from all nations could use these words of encouragement as the “leave” vote roiled global markets, including currencies, causing the British Pound to fall to its lowest level in decades.

For those who don’t know what “Brexit” is or what it means, here is a brief lesson for you. Because we now live in a society that communicates with emojis and acronyms, Brexit is simply an abbreviation of “British Exit” referring to the June 23rd referendum by British voters to exit the European Union. In an eerily similar tone to our own Presidential politics here in the US, the leave vote won on a platform based on nationalism, opposition to immigration, and anti-establishment and anti-elite feelings directed at mainstream political leaders.

So what should investors do? To this question, I refer to the first part of this article’s title; Keep Calm. The market hates uncertainty, and typically manifests as a large increase in volatility. And it is likely that this period of uncertainty could stick around for a while as the process for the UK leaving the European Union will take at least two years to complete, perhaps longer. The worst thing you can do is to panic and sell during times of market upheaval, such as we’ve seen in the two days following the Brexit vote.

The Brexit vote is just one of many panics that the market has experienced through the years. If we just look at the last 15 years, the market has experienced terrible events that would make even the strongest willed investor panic ñ 9/11, the 2008 financial crisis, Greek government debt crisis & Chinese stock market crash – you will see that the investors who were hurt the most were the ones who panicked and sold. Anyone who stayed invested in the market for this whole time period saw their money increase over 118%.

The portfolios that are managed by Trust Company of Vermont are diversified across asset classes, global regions and economic sectors, providing clients with protection against events such as this. We have no crystal ball to tell us what is going to happen in the near term. We try to invest in businesses that we feel create value for shareholders, and we look to own these businesses for years, not days or months. We will “Carry On” and look for investment opportunities for client portfolios. We won’t speculate on what the future holds for the European Union and whether other members will leave, or if another recession is inevitable because of the Brexit. There are just too many questions and not enough answers.


The above was my second attempt at an article for this quarter’s newsletter. In my first go-around, I had decided to write about the upcoming presidential election and the effects that it might have on the stock market. I wrote in that initial draft that I chose that topic because I felt that the people of the UK would vote to stay in the European Union (the general consensus just a day prior to the vote), proving that when it comes to a 50/50 proposition such as the Brexit vote, even those who invest for a living really don’t know.

So stayed tuned for our next newsletter as the contributor from the investment management team may decide to go ahead and expound on how the 2016 presidential election might move the markets. I think you will find the conclusion to that article to be very similar to this one; Keep Calm and Carry On!

© 2019 New Hampshire Trust Co.