Does Brexit reduce your chances of becoming a millionaire?

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Pound coins

Since the EU referendum on 23 June, doubts surrounding the outlook for the UK economy have risen. Predictions of higher unemployment, slower GDP growth and higher inflation have caused many investors to become worried about the prospects for the economy. However, does this mean it will be more difficult to make a million from your investments?

Clearly, in the short run Brexit is likely to cause a slowdown in UK economic growth. This is because confidence in the UK economy has fallen and is likely to continue to fall. The government hasn't yet invoked Article 50 of the Lisbon Treaty. When it does, uncertainty is likely to be ramped up as the terms of Brexit are slowly thrashed out with the EU. Then, once the terms are agreed, the UK will go it alone for the first time in a generation. At this point, confidence may be at its lowest ebb.

One result of reduced confidence is challenging operating conditions for UK-focused stocks. Companies that are reliant on the UK for the bulk of their business may endure declining profitability, with sectors such as banks and retailers perhaps likely to be the hardest hit. And if inflation continues to pick up, disposable incomes could take a double hit from slower GDP growth and more expensive outlays. This could choke off the UK's economic recovery.

Exports, exports, exports

However, these challenges will be offset to a certain extent by improved trading conditions for exporters. The pound has already fallen to £1/$1.23 and further falls would be unsurprising. This means that UK exporters have a major advantage versus their foreign peers and this could lead to increased demand, more jobs and more profit for UK exporters.

Furthermore, UK investors aren't required to invest in the UK. Since the EU referendum, the FTSE 100 has risen by 12% and much of this has been due to weaker sterling. This has provided a currency translation boost to companies that are international but report in sterling. These stocks could gain further from continued uncertainty surrounding the UK economic outlook.

In addition, UK investors are able to invest in indices across the globe. It's relatively straightforward to buy foreign-listed stocks online. They could provide higher returns than UK-focused stocks as fears about Brexit build, and will also reduce portfolio risk since they will lead to greater geographic diversification.

As ever, the future performance of shares is uncertain. However, investors are now able to buy high quality, UK-focused companies at discounted prices. They now provide a wider margin of safety, which in many cases takes into account the potential difficulties associated with Brexit. This provides long-term upside potential and while volatility may be high in the short run, Brexit provides an opportunity for investors to benefit. Therefore, far from reducing your chances of becoming a millionaire, in the long run Brexit could even improve them.

Are you prepared for Brexit?

Following the EU referendum, fear and indecision could hurt share prices in the coming months. That's why the analysts at The Motley Fool have written a free and without obligation guide called Brexit: Your 5-Step Investor's Survival Guide.

It's a simple and straightforward guide that could make a real difference to your portfolio returns. In fact, Brexit could even prove to be a positive catalyst on your portfolio performance.

Click here to get your copy of the guide - it's completely free and comes without any obligation.