ELIZABETHTOWN, Pa. (WHTM) – While looking at stocks on Friday following England’s vote to leave the European Union, Dr. Dmitriy Krichevskiy admitted things didn’t look good.
“The Dow Jones had the single biggest loss since 2015,” said Krichsevskiy, an assistant professor of economics at Elizabethtown College. “It’s because of both the referendum and the fact that everyone expected different outcomes. We saw immediately after the vote was cleared the weakening of the [British] pound and the strengthening of the [American] dollar.”
Krichevskiy explained that because we’re all tied to a global economy, investors tend to panic when something large-scale like Thursday’s historic vote happens. 401(k) accounts took big hits on Friday because they include stocks from all over the world.
“You see all major industries going down, gold is going up, but I wouldn’t liquidate your portfolio as a result of that,” he said.
Krichevskiy said it will take a while to see the full impact of the United Kingdom’s decision to leave the European Union. He said in the short-term, a lower exchange rate is going to hurt companies who ship things to England.
He added, however, that it is good news if you plan to visit the U.K. anytime soon.
“If you are thinking of going to London, now is a probably a good time,” he said. “It’s because the U.S. dollar is going to buy you more British pounds.”
Krichevskiy said the housing market should also be impacted by the split. He said due to a period of uncertainty, it’s likely that interest rates will plummet.