Our top tips to avoid knee-jerk reactions that could end up costing you a fortune

THE stock market may have fallen sharply on Friday morning following confirmation that the nation had voted to leave the European Union, but it made good some of its early losses by the time it closed.

Indeed, the FTSE 100 Index, embracing the stock market’s largest companies by value, finished the week higher than it started.

Though further share price corrections are inevitable in the coming weeks, experts say investors should not be panicked out of the market because that would crystallise losses in their Isas or wider portfolios.

Laith Khalaf, senior analyst at fund broker Hargreaves Lansdown, says Friday was a ‘rollercoaster day’ on the markets, embracing ‘shock, fear and opportunism’: shock, when UK shares slumped eight per cent within minutes of the London Stock Exchange open- ing. Then fear that the market was possibly heading for a crash on the scale of ‘Black Monday’ in 1987. And finally opportunism, as private investors and fund managers tried to pick up shares on the cheap amid the turmoil.

Shares in banks, insurers and housebuilders – the likes of Barclays, Lloyds and Taylor Wimpey – were all bought by private investors after falling early on Friday.

Khalaf adds: ‘The vote to leave the EU has led to sharp falls in the stock market and the pound’s value. Certainties, other than that the UK has voted to leave, will be in short supply for some time.

‘In situations like this, investors need to take a deep breath and count to ten. We expect further choppiness in the weeks to come. Yet investors need to realise that markets are prone to periods of volatility and price falls and rises are par for the course. Knee-jerk reactions are as likely to lose you money as make you a fortune.’

Experts have mapped out a battle plan for investors: