The Aftermath of Brexit

The Aftermath of Brexit

Pros and Cons: What Options Do Individual Investors Have?

The Aftermath of Brexit Pay Taxes Later Blog

What should you do about your own retirement plan in the aftermath of Brexit? Find out why now could be a great time to do a Roth conversion!

On June 23, 2016, a majority of British citizens voted to leave the 28-member European Union – an action referred to as the “Brexit”. The following day, Americans awoke to learn that global stock markets had not reacted well to the news. Our major domestic indices followed suit, with the Dow Jones Industrial Average declining more than 600 points in one day. Trillions of dollars in wealth were estimated to have been wiped out overnight, and more is likely to follow as the world adjusts to the news.

Prior to the historic Brexit vote, I watched with interest as the pollsters interviewed people on the streets and then confidently predicted that Britons would vote to stay in the union. The British pound made gains, and even the lethargic US stock markets seemed cheered at the news. Life, it seemed, would be good as long as the union remained intact. Investors throughout the world thought that the good citizens of Great Britain would never upset the apple cart, and placed their bets accordingly. And guess what? They bet wrong!

Time will tell, but I suspect that much of this market chaos is happening because the investors who relied on the pollsters got caught with their pants down. Plans were made and fund managers structured their portfolios assuming that the citizens of Great Britain would vote to stay – and they didn’t. Now these investors find themselves having to scramble to put their Plan B – assuming they even have one – in place. What does their mistake mean for you?

If you’re clients of ours, you know that we have always advocated using a balanced approach to money management. And we never advocate making changes to your portfolio based solely on what the market is doing. However, for many of you, now would be a great time for you to take that trip to London that you’ve always wanted to do. The US dollar strengthened on the news of the Brexit, and will stretch much further now than it would have a week ago. Or, consider establishing Roth IRAs or college tuition accounts for your grandchildren. If they have ten or more years to wait out a market recovery, you can fund those accounts with equities purchased at prices much lower than they were last week at this time.

What should you do about your own retirement plan in the aftermath of Brexit? If you hold any global funds in your IRA, now could be a great time to do a Roth conversion. By converting when the market value of the fund is low, you pay less in federal income tax than you would when the fund value is high. And if the market continues to drop even further, you can always recharacterize your conversion. I’ll be talking about some of these points on my next radio show on 1410 KQV. You can call in and ask questions during the live broadcast on Wednesday, July 6th, from 7:00 – 800 p.m., or catch the rebroadcast on Sunday, July 10th at 9:00 a.m. You can also read more about Roth conversions by clicking this link on my website:

Please call our office soon if you have been thinking about doing a Roth conversion, and we will run the numbers to see if it makes sense for you. And if you do go to London, send me a postcard!





Government Shutdown a Concern for Investors, but No Need to Panic

A partial government shutdown began today, leaving plenty of federal employees out of work and unpaid. National Parks are closed, FAA safety inspectors are out of work, NASA is all but closed, even The Smithsonian Museums are shut down. Many Americans worry during this time how the shutdown will effect them, their taxes, and the economy as a whole. @MacroScope Reuters tweeted an interesting chart this morning on the performance of the S&P 500 prior to, during, and after the previous government shutdowns.

While we could be facing a bumpy time during the shutdown and immediately after, it looks alike in most cases the S&P 500 didn’t fair so badly in shutdown situations. The shutdown is going to be an aggrevation, but there is no need to start panicking about investments. Contact your advisor before making any hasty buying/selling decisions during this time. An over-reaction could end up costing you!

Announcing the ASK Campaign for John Bogle


What Would You Ask Vanguard’s Founder and former CEO John C. Bogle If You Had the Chance?

Jim Lange is pleased to offer you the opportunity to ask industry giant, John Bogle, your most pressing investment and retirement questions!

This is an unprecedented opportunity to get advice and recommendations from the founder of the largest mutual fund company in the world.

The Lange Money Hour welcomes Mr. John C. Bogle, of The Vanguard Group, as our special guest, November 28, 2012, at 7:05 p.m. on KQV 1410AM, re-airing the following Sunday, December 2nd at 9:05 a.m.

We are issuing an open invitation to submit your most imperative, difficult, and fretful questions to be posed by Jim, to Mr. Bogle.

Just go to the home page of our website, and click the ASK John Bogle button.

As a thank you for participating in our campaign, we will email you a link to the sound file of the interview as soon as it is available.  In addition, our office will transcribe the interview and provide you with the written transcript that you can refer to at your convenience.

Born in Montclair, New Jersey in May 1929, to a family heavily affected by the Great Depression, John C. Bogle had humble beginnings.  Even as a graduate of Princeton University, he could not have known that one day he would be touted by Fortune magazine as one of the investment industries four “Giants of the 20th Century.” (Warren Buffet, Peter Lynch, and George Soros are the other three.)

Mr. Bogle is the founder of The Vanguard Group, Inc. which started operations in 1974.  From the beginning until 1996 he served as Chairman and Chief Executive Officer.  From 1997 until 2000 he served as Senior Chairman.  In 2004, Time magazine named Mr. Bogle one of the world’s 100 most powerful and influential people.  The Vanguard Group is the largest mutual fund organization in the world and it is headquartered in Malvern, PA.  It’s Vanguard 500 Index Fund, founded by Mr. Bogle in 1975, was the first index mutual fund available to the public.

Don’t miss this once in a lifetime opportunity.

As this particular show will be recorded in advance and not aired live, we encourage you to go to our website and submit your questions to Mr. Bogle, by Wednesday, November 14, 2012. Just click on the ASK John Bogle button to submit your question. Then tune in Wednesday evening, November 28th, to hear your questions answered by one of the industry’s most influential thinkers.

If you can’t tune in Wednesday evening, KQV will broadcast the show Sunday morning, December 2nd, at 9:05 a.m., and it will be available shortly after at, along with the full library of The Lange Money Hour presentations.