The British vote to exit the European Union yesterday, or Brexit, is sending shock waves through global markets, and we advise subscribers not to get caught up in the fear selling that will likely take place in the next few days and weeks.

But given the volatility, we’re going to put our most sensitive stocks – those in our Aggressive Portfolio – on hold for now. But we’ll also recommending a bargain: National Grid. Details below.

Next week and in the months ahead we will be providing a rundown on all of our holdings and how investors should react to this new investment environment. 

Though Britons voted for exiting the European Union, the actual process to leave the European Union is a long and bureaucratic process. The trigger for Brexit is actually invoking what is called Article 50 which the outgoing UK Prime Minister has said won’t be invoked until October when there are new elections. So, actually nothing has changed.

And even when triggered it could take more than 2 years for a full exit, which by that time many expect the UK government will have alternative trade agreements in place.  

Clearly, the biggest implication of Brexit is that the European Union is at risk of destabilization as other countries may choose to leave. It’s our belief that when the smoke clears and cooler heads prevail, what will actually happen is that the UK will essentially fight to preserve its best trade relationships with Europe, as will the European Union as it has a significant surplus with the UK.

It may be the case that Britain and other countries exit politically or in “name only” to placate disaffected voters, but for all intents and purposes the business and trade relationships will stay in place.

It’s my sense  that there will be significant backtracking, as one of the possible candidates for Prime Minister which campaigned on Brexit has also been backtracking somewhat on how severe the “exit” may be, as he would be blamed if the UK falls into recession.

To date, our Global Income Edge Conservative global portfolio has been effective in withstanding the volatility and delivering income, and we believe our global approach, investing in multinationals that are less exposed to any one country gives these investments significant benefits, especially as they have pricing power in their sectors.

We believe many of our multinational British and European holdings simply could relocate their headquarters if the situation becomes dire in the UK following the Brexit vote. Of course, I’ve considered that given the uncertainty in Europe, it’s likely that the U.S. might benefit as a headquarter destination for European companies looking for a safe haven, much as investors flock to U.S. treasuries when there is significant uncertainty.   

Further, these multinationals have already become experts at navigating tariff deals and positioning globally for maximum benefit, though I’m sure they are surprised that they will have to employ those skills in their developed, home economies.

With respect to the Global Income Edge Aggressive Portfolio, we’ve long said that during times of heightened volatility and slower global growth, these holdings underperform. And given the significant volatility expected, for the time being we are putting all of the Global Income Edge Aggressive Portfolio holdings on Hold until we can better evaluate the long-term implications.

 National Grid: A Brexit Opportunity

The Brexit vote has created significant volatility in European shares, which is an opportunity to buy at a deep discount United Kingdom -based National Grid PLC (NYSE: NGG), one of the world’s largest regulated energy utilities.

Over the last week, we spoke with the utility’s management and investor relations, which believe that the major impact on the company would be on share price in the case of a vote to exit the European Union or Brexit, and there may be some foreign exchange impact.   

But otherwise, the impact on earnings would be marginal, even if the U.K. slipped into recession as a result of leaving the European Union as some fear. Because the utility is guaranteed to earn on its infrastructure business, or recover its costs, as it is a regulated monopoly.

Where there has been some concern in terms of National Grid is that Brexit could put at risk the company’s Interconnector projects to import power from the European Union as agreements would have to be renegotiated.

But National Grid’s CEO in the company’s last earnings call said he didn’t believe there would be a “significant impact” as there’s a desire by the U.K. and Europe to maintain electricity trade whatever the outcome of the vote, and at present the Interconnectors represent a small part of the business. 

National Grid, the size of one of America’s largest utility, Duke Energy (NYSE: DUK), offers stability and international earnings diversification,   All of its revenue comes from two of the world’s most stable economies, the United Kingdom and the United States, which represent about 54% and 46% of the company’s business, respectively.

In a world where finding safe haven assets at reasonable prices has been a chore given recent volatility and investor flight to safety that has pushed up prices to unsustainable valuations, the The Brexit vote represents a rare opportunity for income investors to have a solid utility business at a fair price.

With a dividend yield of 4.36%, NGG is a Buy up to $74.