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The Brexit effect on your personal finances will be subtle but still unwelcome.

Two possible outcomes stand out from Britain's narrow referendum vote to leave the European Union – grinding stock market volatility and interest rates that remain low for longer or even decline.

Thought you were done with bonds because of the low yields? The hysteria on stock markets following the surprise referendum vote in Britain caused money to flood into bonds. No matter how low bond yields get, investors will still buy in when stocks look scary.

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There are so many story lines to the Brexit story to be resolved that continued stock and bond market volatility is almost guaranteed for the months ahead. Britain isn't the United States or China – it's not a fulcrum of the global economy. But the social, financial and political upheaval in Britain is a shock to the world, with ripple effects in Europe and its trading partners. Every development that brings more uncertainty weighs on stocks. The shame of it is that the Canadian stock market was just starting to put together a nice run.

Whatever volatility lies ahead, investors should ride it out. What not to do: Let emotion take over and start dumping stocks in a panic. That's why the world's institutional investors – supposedly the smart guys – did in the initial aftermath of Britain's vote to leave the EU. A measure of sanity did return later – you could see it in the way many markets backed off their lows for the day on Friday. But overall, the story of the day was "sell first, ask questions later." When individual investors do that, they tend to do more damage than good to their portfolios.

The concern global investors have is that the Brexit vote will hurt the already fragile level of growth in Britain and Europe. Expect central banks in Europe and globally to be exceptionally cautious about deteriorating economic conditions. Rate cuts can't be ruled out, even in Canada. Keep that in mind if you're arranging your bonds or GICs in such a way as to capitalize on higher rates ahead. We'll see higher rates, but more and more the question is whether it's going to be in this decade or next.

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