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Brexit Chaos: How Investors Can Stay Calm

Morningstar Investment Management's Dan Kemp says the link between political events and investment returns is less predictable than we think.

Note: With Brexit concerns roiling the market this week, we're presenting a commentary from Morningstar Investment Management's Dan Kemp on the right way to think about political risk. A version of this article appeared on

People love to talk about Brexit, and investors can be tempted to trade based on expected outcomes. We believe the investment basis for this is weak and don't see a strong connection between political developments and investment fundamentals. Benjamin Graham--the father of value investing--considered investing in something you don't understand and can't analyse to be speculation. We agree. As long-term investors, politics doesn't play much of a role in how we view our portfolios. We want to know the range of possible outcomes and position accordingly, but we must resist speculating.