The stunning Brexit move in Europe has led to plenty of fear and lots of speculation on where the best quick trades can be made.
As markets digest the news, short-term traders have been moving money quickly. The two-day market plunge has seen billions poured into exchange-traded funds that track the price of gold as well as various indexes within bonds.
But what about investors playing the long game — those with horizons that run three to five years rather than three to five minutes (or seconds)?
Here are some basic moves retail investors can make while traders on Wall Street look for the Brexit dust to settle:
Go small
Credit Suisse is telling clients to look beyond the fear in headline-grabbing large-cap stocks and turn focus to smaller companies. Like many others on Wall Street, the firm also is advising clients to cautiously focus on valuations when making investment decisions.
Value stocks have outperformed both growth and the broader market this year, still up 1.6 percent for the year despite the recent sell-off that has sent all market averages into negative territory.
"Longer-term, we see deeply compelling valuations in small-cap relative to large-cap and in large-cap banks relative to the broader market," Lori Calvasina, chief U.S. equity strategist at Credit Suisse, said in a report for clients. "But it is difficult to get excited about either in the short term, as both have consistently lagged in the pullback phases associated with post-2009 financial market shocks."
The firm also sees value in retail and transportation stocks in both the small- and large-cap spaces.
"Small caps continue to look deeply compelling relative to large cap, in what is a deep and broad-based story," Calvasina said. "Even if small caps lag shorter term due to general risk aversion, we think a historic opportunity in small caps has emerged that is both deep and broad based."
Avoid the crowd
Pressure to sell after the vote is going to intensify, and bring with it lots of mistakes.
Citigroup expects to see investors dump cyclically oriented stocks in an erroneous move that will come even as industrial production improves and the Brexit spillover effects into the U.S. are limited. Moreover, the unsettled state of geopolitics — in particular the populism that spurred the Brexit vote and popularity of outsider presidential candidates Bernie Sanders and Donald Trump in the U.S. — is unlikely to impact U.S. markets as much as feared.
"In the past, such a depressed zeitgeist did not generate a new bear market but provided the basis for a recovery," Tobias Levkovich, chief U.S equity strategist at Citi, said in a note. "Trading on emotions generally is not a smart reaction to unexpected developments and the U.S. has shown itself able to grow its economy even when Europe slipped into recession, which is not the Citi forecasts in any event, though risk premiums are likely to climb in the short term."
Citi also recommends cutting positions in growth and safe-haven stocks while increasing positions in energy, industrials and financials.
Keep calm, shop on
Cash is your friend at times like these, and should be deployed judiciously.
"This is a very good time to be prepared. We hold a significant amount of cash — almost 15 percent of portfolios," said Michael Kresh, president of M.D. Kresh Financial Services. "We're excited that we can put some of that cash to work."
Kresh recommends investors wait a few weeks to see which companies are sold the most during the current downturn and look for opportunities.
However, those with a long-term outlook should be careful not to look too hard.
"We caution against any attempt to predict the price movements of fluid, unpredictable, volatile markets," Integrated Wealth Management advised its clients. "Concentrated bets should also be avoided, and major portfolio shifts, often driven by emotional reactions, can be catastrophic to long-term investment success."