Brexit adds ‘huge unknown’ to Ga. economic outlook

3. Falling stock markets mean buying opportunities will emerge. Stovall recommends looking for bargains among small-cap and medium-cap U.S. stocks, which generally are less exposed to international markets.

4. The experts aren’t always right, as Thursday’s rising stock market before the Brexit vote shows. Avoid lopsided portfolios that make you vulnerable to unexpected events, says Lembeck.

— Russell Grantham

In the wake of the Brexit vote, it may be the uncertainty more than anything that threatens Atlanta and Georgia economically.

“It is a huge unknown and in economics and finance, anything unknown is bad,” said Emory University economics professor Tom Smith. “People do not like uncertainties and the human mind seems naturally to think about what could be the worst of all possible situations.”

The U.S. economy should be strong enough to navigate through Brexit aftershocks. Still, the surprise outcome from across the pond comes at a time when the economy’s biggest vulnerability is the perception that it is vulnerable, he said.

“We have been in an economic recovery that doesn’t feel like an economic recovery. So we have been waiting for some other shoe to fall. This gives us an excuse to think the worst. We can handle a little freak-out, but we are on a razor’s edge here.”

The Brexit vote is a modest event for the state economy, said Rajeev Dhawan, director of Georgia State University’s economic forecasting center.

Georgia exports to the European Union were valued last year at about $7.7 billion, roughly 20 percent of the state’s overall exports, Dhawan said.

Britain accounted for less than one-quarter of the EU total, Dhawan said, adding: “So the health of the EU matters to us more than the health of Britain matters.”

Dhawan also predicted the vote will keep the Federal Reserve from raising interest rates for a time, which will keep mortgage rates low.

“That will be a boon for consumers who want to refinance or to buy a home. The consumer is going to have cheaper financing.”

Investors stunned

The vote shocked the investing world, which had largely assumed at least a narrow win for the “remain” camp.

“People are just stunned at how they got it so wrong at the end,” said Gabe Lembeck, senior investment analyst at Atlanta money manager Balentine. He said investors should wait until the dust settles, but there may be some bargains that emerge.

“It’s usually an overreaction,” he said of the post-vote turmoil.

Bernhard Langer, an executive at Atlanta money management firm Invesco, voiced his misgiving about an upset result at an investor meeting Thursday evening as counts were tallied.

“I don’t see any positives in it at all,” said Langer, formerly Invesco’s chief investment officer in Germany.

“We have an anti-establishment movement around the globe everywhere,” said Langer.

Brexit could lead to “contagion” in Europe, added Arnab Das, Invesco’s head of research for emerging markets.

Less dire view

Dhawan took a less dire view on Friday, even as world stock markets cratered.

“It’s basically changing the title of a house. But the house is not going away,” Dhawan said. “The productive capacity of the economy is not going away.

“Yes, it will mean a mild recession in Britain, but the markets are reacting as if it’s all over,” Dhawan said.

Marcus Marktanner, an economics professor at Kennesaw State University, said predicting a Brexit outcome requires knowing the answer to many questions: What happens to the exchange rate — up or down and how much? Will London remain a financial hub? What will happen to the movement of workers, goods, services and capital?

And ultimately, how will other players – people, companies and countries – respond to what Britain is doing?

“I cannot imagine that trade and investment activity between the UK and the rest of the world, including Georgia, will not be negatively affected,” he said. “Economic crises are like the flu, they are contagious.”

— Leon Stafford contributed to this article.