When you woke up on Friday, June 24th, chances are you didn’t make it long in flipping through the television, or listening to the radio before learning that Britain has voted to leave the European Union. “Brexit,” as it is commonly being referred to as, is the result of a 52-48 referendum vote to sever ties with the European Union, a bloc they joined over 40 years ago.
Various headlines rung throughout international media. Yes, Brexit is the first departure from the alliance since the EU was formed 43 years ago. Yes, Britain’s Prime Minister, David Cameron, has announced his plan to step down later this year. Yes, this will cause short-term market volatility. And yes, we have seen events like this before, and will certainly see events like this again.
Let’s step back from today’s headlines, and look at a broader picture of historic events and how the market has reacted to them over both short-term and long-term holding periods: