Depending on the results of the Brexit vote you may want to consider how to invest in British stocks. What is a Brexit and what does that have to do with British stocks? The United Kingdom will soon vote in a referendum to decide if the nation should stay in the European Union or leave it. Brexit = British exit from the EU. Would an exit from the EU be a good for bad thing from a UK perspective? Business Insider UK is starting to think that a Brexit is a good idea. This is despite numerous dire economic projections.
Seeing how the markets and politicians have dealt with the eurozone sovereign-debt crisis, the worst refugee problem since World War II, and constant squabbles over EU lawmaking that wrecks national sovereignty, I have become fully unstuck from the mud of the pro-EU camp and will sit on the fence until we vote.
For many Brits the issue is and has always been one of national sovereignty. They don’t like the idea that a bunch of folks in Brussels are deciding their fate. So they may be willing to suffer economic consequences to regain what they believe is their well-deserved freedom. So what does all of this have to do with how to invest in British stocks? The GBP, the British currency, has been taking a hit as polls suggest Brits will vote against being in the EU. A weaker currency will make British exports more competitive. A weaker GBP will also make British stocks less expensive to buy.
A Brexit and UK Manufacturing
The Guardian thinks Brexit would help UK manufacturing because it would do away with high EU tariffs.
There is a reason why our internationally competitive manufacturing companies such as JCB and Dyson support Brexit. To survive and compete the UK has to expose itself to international competition and needs to focus on selling into the fast growing markets of the future.
The alternative of remaining protected behind the tariff wall and regulations of the EU makes companies flabby and less competitive in global markets. Yes, there are many big firms who want to remain in the EU. Not only do those big firms have the ability to lobby Brussels but they all too often focus on the short term and their next quarter’s results.
A weaker pound would help UK exports and perhaps a reduction in trade regulations might also be useful.
How to Invest in British Stocks
You can buy British stocks online via a number of brokers. The nice part of investing in British stocks is that you will not need to read a stock prospectus in a foreign language! But you will be buying and selling in British pounds. Alternatively you can buy American Depositary Receipts of British stocks. You can buy these using the same platform you use for American stocks. TopForeignStocks.com lists 175 British stocks that trade as ADRs. These include Astrazeneca in biotech, British American Tobacco, big pharma giant GlaxoSmithKline, oil giant BP, the mining conglomerate Rio Tinto, oil giant Royal Dutch Shell and Diageo the alcoholic beverage behemoth. Decide how to invest in British stocks and then wait to see what happens with the Brexit vote on June 23.