HUNTSVILLE, Ala. (WHNT) - All of this talk on the United Kingdom departing the European Union can be complicated, so we spoke to local experts about what this means for you and your money.
Just as soon as the opening bell rang at the New York Stock Exchange this morning, the Dow plunged more than 500 points. That can alarm a lot of people with investments, but Vern Gohannah of TaxCorp stresses caution. “Stay calm, stay steady, leave your investments alone," he says.
Like any divorce, so to speak, the UK's separation from the European Union will take some time, many experts predict at least two years, so the current market volatility should calm down. “Even if it’s a short-term decline, it’s going to come back up. As an adviser, I would tell people. Stay where you are, listen to your tax professionals and don’t panic over a quick vote by what’s going on overseas," says Gohannah.
Vern says in the coming weeks, you could consider looking at your Mutual Funds to see how dependent they may be on European-based investments. “You might want to get into something that doesn’t give you as much exposure there," he says.
He stresses, you should still make your portfolio as diverse as possible.
Gohannah says retirement planning should be a long-term investment, so stay put on your 401-K plan. “There will be a little bit of a downside for a few days maybe, but the markets always bounce back," he says.
The EU and UK separation will take some time to finalize, so Vern believes many companies will have plenty of time to react to this and plan ahead.
Jim Owens, North Alabama Area President of First Bank, says in year over year trends, our area is seeing a 13% increase in home sales. “It’s a good time to be a buyer," says Owens.
He thinks the Brexit announcement may actually help home buying numbers. “Obviously, confidence in the economy has a lot to do with what people, what kinds of decisions they make but our housing market is pretty vibrant here in north Alabama," says Owens. “In the short run, it’ll actually probably lower interest rates a little bit.”
Owens says lower interest rates is one of the biggest drivers for the housing market because it means a lower monthly mortgage payment for buyers. “If you’re waiting on it to get better, I’m not sure it’s going to get substantially better than it is right now," he says.
Unfortunately, those low rates may not last long. “Some of the forecasts are pretty substantial increases by the summer of this time next year," says Owens.
He says the Brexit situation is something to certainly keep an eye on, but nothing to panic over, just yet. “I really think there are larger factors at work in the economy that will find their way through to Huntsville and North Alabama but I don’t expect any dramatic changes over the short-term," says Owens.
Jim adds this is an excellent time to refinance your mortgage, while interest rates are at an historic low.