So, after months of build up, we are nearly there. On 23 June 2016 the UK will decide whether to stay in or out of the EU. And, for the first time through out the whole of this campaign, the opinion polls have moved clearly towards Britain leaving Europe.
Even the bookies, who up to now have been favouring ‘Remain’ by a 2:1 or 3:1 ratio, are now starting to move towards Leave. Investors are now having to face the reality that Brexit really could happen.
Brexit really could happen
And I think it is no coincidence that markets around the world, and especially the FTSE 100, have been falling. In April of this year this stock market index stood at 6,400. This week it has tumbled below 6,000, and the current number is 5,977.
For long-suffering investors who are just emerging from a 17 year bear market, this is the last thing they needed. And the effects spread beyond equities. In the currency exchanges, the pound has been sliding against both the pound and the euro.
In contrast, beaten down commodities such as oil and gold have been recovering some lost ground, and the bond market is booming.
I just wonder if David Cameron realises just what he has unleashed. Even though politician after politician, whether Labour or Conservative, has called for the UK to Remain, and world leaders from Barack Obama to Angela Merkel have put the case for staying in Europe, Britons seem to have decided that they will ignore all the arguments and decide for themselves.
Be prepared
I see a culmination of worries and fears rising to the surface. People talk about the meddling Brussels bureaucracy, of too many laws, of the extra cost, and, above all else, a never-ending stream of unfettered immigration that, to many people, seems out of control.
Add on to this anger at the Eurozone crises that have reverberated across the continent in recent year, and the public seems to have decided to turn against Europe, against the general consensus of recent years, and many major politicians of the day. It has opened up a veritable Pandora’s box of anger and resentment at the ‘establishment’.
Yet commentators, including myself, have reiterated the fact that we should not turn back the clock on 60 years of European progress, on help for businessmen, scientists, farmers, the underprivileged, the low-paid and millions of other stakeholders in the European project.
And there is still a strong chance that the people of Britain will decide to remain in Europe. But, otherwise, I fear falls in the FTSE 100 and the pound will continue, that several companies will choose to base their operations elsewhere, and that hundreds of thousands of jobs will be lost.
But now I think we have moved on from trying to stop this from happening, to preparing for what could actually happen. Be prepared for more disruption in the markets. Investors will have to see this storm out but bold contrarians will know that, as prices fall, there may also be bargains to be had.
