Markets were blindsided last night with Britain voting to leave the EU. Here are some things investors need to keep in mind: 

1) This isn't the 'end' - Economies have been through much worse events over time and have gotten past them to see markets reach new highs over the long-term.  We see no reason why this would not be the case again. It creates uncertainty, but business will still go on.

2) Britain is not 'disappearing' - At the end of the day, Britain is still a functioning economy. People will go to work, and people will consume goods and services.

3) The news is having an impact on all markets but we think it is important to remember that Canadian companies do not have an overly material exposure to Europe in the form of revenues. Financials should be the most exposed and, for better or worse, they should also be the best equipped to weather events like this.

4) Selling into the panic is never the best course of action - There is a lot of uncertainty surrounding this result right now. No one really knows how it will unfold and this uncertainty is what will likely impact markets most. By the time investors are able to sell, it is likely that the short-term damage will be done. We would let things settle down over the weekend and reassess at that point. If an investor wanted to lighten up their equity holdings, we would probably look to financials first, as they should be the most sensitive to any slowdown in Europe.     

Overall, as we outlined in our Brexit blog last week, this result is hard to paint in a positive light over the short to medium-term. Investment will likely dwindle in the UK and growth should stall due to all of the uncertainty. The next risk that will come from this is other countries considering a similar referendum, but we think most will take a wait-and-see approach, especially after viewing the market reactions today. The silver lining is that this issue should be contained to Europe. Yes, slower GDP growth in the UK and EU will likely have some knock-on effect in North America but the prospects of North America do not and have not relied on the prosperity of Europe (the US is a different story for Canada of course).

It will be a tough day and likely a tough week next week due to the Brexit result  but we far prefer to view events like this as opportunities to enter a market or stock at attractive prices rather than a time to sell and head for the hills. Ou tof interest, we have included an image showing the reaction of the GBp at the bottom.

We have outlined to our members how we would approach this decline in an earlier e-mail and hope to have a list of companies to consider in the next few days for members. So feel free to join now if you are not yet a part of 5i Research. 

Ryan Modesto, Managing Partner at 5i Research will also be appearing on BNN Market Call Tonight at 6PM to discuss stocks and very likely Brexit.