Wow! Last Thursday, the UK Brexit referendum passed with 51.9% of voters choosing to leave the European Union.

We knew the referendum was one potential source of volatility this year, but we, like most people, thought they would choose to remain. Many markets were caught off guard and on Friday there was huge volatility in most markets around the world.

A number of equity markets were down significantly:

Euro Stoxx -7.55%, DAX -6.19%, France -6.98%, Spain -11.08%, Japan – 7.92%.

North America wasn’t as bad:

S&P 500 – 3.6%, S&P/TSX -1.69%

According to CNBC, currencies and commodities were also quite volatile. The US Dollar and the Japanese Yen surged. The British Pound dropped over 10% to a 30 year low. Gold jumped almost $90 at one point (which actually helped cushion the blow to Canadian stock markets) and oil dropped 5%.

As we have stressed all year, we are approaching this year with caution. Our first priority is to protect capital. And it was great to see how well our portfolios held up on a very chaotic day. Most of our portfolios would have been slightly positive on Friday.

We have Brexit, now what?

Prospects for already-sluggish global growth will likely slow further. The Fed is unlikely to raise rates anytime soon. There are rumblings of EU membership referendums in other countries. And there will likely be greater than normal volatility in the days and weeks to come.

There will also be great opportunities as some markets get oversold - or as new investment themes move to the fore. We will continue to weigh those opportunities while trying to manage the volatility that choppy markets pass to our portfolios