Where To Invest After A British Breakup

Brexit is almost certain to mean more volatility in global stock markets. Here’s how to profit from keeping a stiff upper lip.

- Lauren Silva Laughlin

“BREXIT,” in which British voters defied the prognosticators and chose to leave the European Union, set off shock waves that could very well have a global economic impact. But the reaction among stock investors, in the words of a slogan coined by the British government during World War II, has been “Keep calm and carry on.”

While stocks in the U.S. and most of Europe fell sharply immediately after the June 23 referendum, they rebounded almost as quickly. Within three weeks of the vote, the S&P 500 reached record peaks; the Stoxx 600, a broad Europe-wide index, made up almost all of the 11% it lost immediately after Brexit; and Britain’s FTSE 100 index was flirting with a 52-week high.

Still, the cheery news conceals a current of genuine worry. In interview after interview, investors told Fortune they were jolted by Brexit’s long-term implications. “You had 15 to 25 years of increased globalisation, [and] the equity markets and global economy benefited from that,” says Matt Kadnar, a portfolio strategist at investing giant GMO. If Brexit-like sentiments in other nations leads to restrictions on the flow of trade and labour, he adds, “that is going to create greater uncertainty and volatility”—at a time when some commentators believe that global stock and bond prices are overdue for a tumble.

That said, few money managers believe Brexit will create immediate problems for investors. On the contrary, most think reactions to the vote are creating pockets of opportunity. Their broader advice: Remain alert for future geopolitical shocks—but stay invested. Here are three of the biggest trends they’re acting on.

The retreat to America.