Some 58 per cent of FE Trustnet readers were waiting for greater clarity from the EU referendum before investing. Now the vote has passed, have they found what they are looking for? 
The answer to that is an unequivocal ‘no’.
Thursday’s surprise victory for the Leave campaign has taken nearly everyone by surprise, especially those in the market who had priced a narrow Remain win.
The fallout from the referendum was immediately felt. Sterling had its worst ever session and fell to levels against the dollar not seen since 1985, the FTSE 100 plunged by 10 per cent on opening and UK gilt yields dropped to record lows.
All this was not helped by David Cameron’s resignation, which again threw even greater uncertainty into the mix.
What’s even more remarkable is that, despite the calamitous start to the trading session, the FTSE (with an hour to go till the market closes) has nearly recovered all of its losses – only fuelling the idea that no-one has any clear idea what is going to happen to financial assets following the decision of 17,410,742 UK voters to vote for quitting the union.
Performance of FTSE 100 following Brexit result
Source: Google Finance
Either way, the result of the referendum will undoubtedly be a major source of frustration for UK investors – especially the 1,000-odd FE Trustnet readers who were waiting in the wings with cash to deploy.
Though many argued that a ‘Bremain’ was priced into markets and therefore any ‘in’ vote-induced rally would be minimal, it is clear that international investors were also waiting for “greater clarity” before committing their capital to UK assets.
This was (albeit crudely) shown in a recent FE Trustnet study, which showed that managers in the IA Global and IA Global Equity Income sectors had their lowest weighting to UK equities than at any point over the past three years prior to the referendum.
Global managers’ weighting to UK equities over 3yrs
Source: FE Analytics
So, what should UK investors do now?
This result has, of course, only thrown up a multitude of unanswered questions.
Who will be the next prime minister? How long will the negotiations last? Will other EU member states want to determine their own future relationship with the bloc? What will the UK actually look like (in terms of member states) once the negotiations finish? The list goes on.
This, along with the likelihood that sterling will bounce around on the back of different statements both here and on the continent, suggests that there is even less clarity in markets now than there was on Thursday.
Indeed, it seems as if Pandora’s Box has been opened.
"Today we stepped off the economic and political precipice,” Richard Champion, deputy chief investment officer at Canaccord Genuity Wealth Management, said on Friday. “Sterling, company profits, unemployment, economic growth - a big fat question mark hangs over everything.”
Though (as FE Trustnet pointed out on Friday) Brexit doesn’t carry the systemic risk to the global economy like the collapse of Lehman Brothers, it is almost guaranteed the UK’s economy will be in a rough ride over the immediate future.
While Mark Carney and the Bank of England have issued a statement saying it is “standing ready”, questions will be asked as to how much firepower the central bank has left after eight years of ultra-low interest rates (and the odd bout of quantitative easing) to stave off a recession.
As such, it comes a little surprise that (at the time of writing) it is more domestically focused stocks and those with close ties to the UK economy that have borne the brunt of the Brexit storm.
The list of the worst performing FTSE stocks include housebuilders such as Persimmon, Taylor Wimpey, and Barratt Developments (all down more than 22 per cent) as well as financials like Lloyds, Barclays and Provident Financial have also saw hefty share price falls.
On the other hand, gold miners and large-cap multinationals that are likely to benefit from sterling weakness have rallied.
As can be imagined, PR teams within the financial services had one of their busiest ever mornings in an attempt to get the voices of their spokespeople heard within the industry. 
The overwhelming message to investors is a need for calm. The idea that sitting back, doing nothing with portfolios and assessing long-term goals is exactly what is required during periods of such uncertainty like these – whether that means holding onto cash or not selling existing holdings.
“The initial reaction on seeing a market fall is to sell to avoid losing any more money,” AXA Wealth’s Adrian Lowcock said.
“Usually investors sell on the bad news and only come back to the market once they have seen it stabilise and recover. Selling any investment will be after the event and will mean you realise any losses.”
For those offering recommendations, though, the favourite hunting ground appears to be large-cap dividend paying companies.
“It is foreign investment that has built up our banking, financial services and automotive industries and it remains to be seen how these businesses react over the medium to longer term,” Premier’s Chris White said.
“It is likely that defensive stocks and multinationals will come to the fore, whilst financials and both consumer and industrial cyclicals will come under pressure.”
In that sort of outcome, the likes of CF Lindsell Train UK Equity, CF Woodford Equity Income or Invesco Perpetual High Income could well benefit due to their overseas exposure – whether that be via overseas stocks or look through earnings via UK-listed multinationals.
On the other hand though, most seem to advocate steering away from mid and small-caps thanks to the fact they tend to be more domestically-orientated than FTSE 100 companies. The FTSE 250, for example, was down 8 per cent by Friday lunchtime.
“Now the Leave vote is in, we expect a period of uncertainty that will impact domestic consumer confidence and business investment within the UK,” FE Alpha Manager Anthony Cross, who co-runs the Liontrust Special Situations fund, said.
“The likely fall in sterling will be a two-edged sword. It is a negative for companies that need to import goods or services but beneficial for those who export. Uncertainty in the run up to the referendum triggered notable falls in UK consumer sectors such as retailers and housebuilders.”
He added: “Overall, we expect a short-term sell off in equities with a greater impact felt among the mid 250 stocks and smaller companies.
That being said, there are many instances in the past where investors have been rewarded by buying when the market has entered panic-mode.
For example, FE data shows that certain funds (all of which are biased towards smaller companies) have returned in excess of 250 per cent since 15 September 2008 – the day that Lehman Brothers filed for bankruptcy and therefore triggered one of the worst equity market declines on record.
Top 10 performing UK funds since Lehman’s collapse
Source: FE Analytics
Trading data from Hargreaves Lansdown suggests many investors have been following that strategy, as 80 per cent of transactions on the platform on Friday were purchases.
‘Private investors are clearly seeing today’s market fall as a buying opportunity, and are out in force bargain-hunting. The most popular stocks are also those which have seen their prices hit hardest this morning, namely the banks and house builders,” Laith Khalaf, senior analyst at Hargreaves Lansdown, said.
However, the past is no guide to future returns and fund managers are seemingly taking a different approach: preferring to let the dust settle before buying in, especially given non-UK related uncertainties prevail in the form of the US presidential election and China’s future growth.
Richard Stammers, investment strategist of European Wealth, said: “The heart says that this is an over-reaction and a great entry point. The head says that there is much to digest and that letting the dust settle is prudent. In such uncertain times, prudence wins. For now we will be watching and waiting."