Some things to remember about markets:

1. Markets behave rationally over the long term, but over the short term they can be very irrational.

2. The FTSE100 has recovered all its losses, but this has to be tempered against the fact that the pound is worth less than it was a week ago, and the Bank of England has so far artificially pushed £3.1bn into the markets to keep them afloat.

3. The FTSE100 is a poor metric for the UK economy because most of its companies are international. The FTSE250 is much better, which was hit much harder and has not yet recovered even in GBP terms.

4. The markets bouncing back so quickly is probably because people are betting against Article 50 being invoked in the near future. However, people seem to have a habit lately of predicting important things wrong. As soon as A50 happens, all that money will disappear again and there won’t be a nice floor set by doubt over whether it’s really happening.

So in summary: if you have a spare £10k and you’re considering dropping it into the FTSE100, I’d put it somewhere less volatile. Have you considered Bitcoin?


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