Investors View Macro Political Hiccups

Today the 56 million people of the UK vote on Brexit, whether to remain in the EU, with significant ramifications for their economy and for the economies of the EU member countries and the US and Asian economies. Only 4% of US exports are shipped to the UK but the instability of the financial markets would be a far greater impact. The shift in the pound is predictable based on the vote but the flight to safer investments by the Brits is less certain. if the vote is to leave. The hostility of the US Presidential campaign is a similar hiccup to the rational functioning of the economy because unlike in 2012, this campaign will have smoke and fire. So how are real estate investors to view these macro political events? Are they a reason to slow investment activity or a reason to monetize previous investments? In our view, these events are reasons to be more aggressive, to line up investment professionals so you can act on the opportunities created. A price correction in one sector could be a buy moment or prompt a buy in another sector. We have searched for survey data that measures the lost opportunity cost of inaction versus the losses from investments in uncertain times without data but we surmise there are always reasons to wait and in so doing especially in a low interest rate environment the surrender of returns otherwise available.

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