Matthew Lekushoff |


Much ado about Brexit

Who says referendums aren't exciting? With a narrow margin, the United Kingdom voted to exit the European Union last week. The result gave most markets a good shake in the southwardly direction over the two days following the vote. On the plus side, bonds and gold rose due to their reputation for being safe havens with gold reaching levels not seen since 2014.
As Brexit nerves settled, most stock markets rallied back within with a few percentage points of before the vote, with the exceptions of European and UK markets. As of Thursday morning they are still lower, but not nearly as much as after the first two days.

I usually don't comment on currencies, as most of the holdings in our portfolios are hedged, but given the incredible movement between currencies since Brexit, it's worth a word or two. Immediately following the results, the British pound was...well, pounded (forgive the pun), falling to a 30-year low against the U.S. dollar. For those of you who contacted me about how the loonie has fared, as of this morning, the Canadian dollar gained almost 9% against the pound since the vote.
Looking ahead, the fallout from the vote is almost completely unknown as we are in unchartered waters. Of course, this hasn't stopped people from speculating. Visual Capitalist published an infographic illustrating the results regionally, and which EU countries may be considering their own referendum.

As for the silver lining, should the pound not bounce back, it's reasonable to expect the U.K.'s tourism and export sectors to be comparatively robust in the coming year. However, should their currency fall further, the world's fifth largest economy may need to make some adjustments to ensure the pound doesn't enter a free fall. Again, what will happen is pure speculation given the thousands of random variables at play.
In regards to our portfolios, they have weathered the recent storm well. As of last night's closing values, they are currently higher than at May's month end. As markets are positive today (as of noon) we'll likely end the month with positive returns.
Should volatile return to global markets, we may look to rebalance our positions in order to take advantage of the global markets that have fallen most.

On the review queue
Ecology  by Crash Course: Ecology has intrigued me for some time. This 12-part YouTube series (10-13 minutes each) was a great introduction to the field. If you're interested in ecology or a quick and fun way to learn new things from philosophy to astronomy to world history, I highly recommend you take a look at the  Crash Course  page.
Economic Inequality  by Paul Graham: An interesting essay by the founder of the highly successful startup incubator Y Combinator . Paul Graham argues the income inequality debate has been too focused on the amount of income inequality, thus demonizing wealth and job creators, as opposed to concentrating on the more important issue of how to help people get out of poverty.

Malcolm Gladwell Got Us Wrong  by Anders Ericsson and Robert Pool: I'm currently reading Malcolm Gladwell's most recent book, David and Goliath, so the title of this article jumped out at me. The original authors of the 10,000-hour rule attempt to set the facts straight regarding what they believe Gladwell only understood in part.
The Feynman Technique: The Best Way to Learn Anything  by Farnam Street: Great article on how to make sure you really learn and understand something. It's helped me realize I can do a better job in my learning process. It's worth hitting the link just for the Mortimer Adler quote at the top.


The redesign
As some of you may have noticed, my website received a makeover this month. Check out the new upgraded and mobile-friendly redesign. I'd love to hear your thoughts!
Just for fun 
In light of Iceland's surprising (to say the least) victory over England Monday, this Iceland commentator couldn't contain his joy during Iceland's last-minute goal against Austria.
Football phenome J.J. Watt and Jimmy Fallon face off over a hilarious game of Egg Russian Roulette.
Happy Canada Day!!




Matthew Lekushoff, CIMA

Financial Advisor 

Raymond James Ltd.


T: 416-777-6368 | F: 416-777-7020


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