There's one thing we know from the Brexit vote: Nothing is certain except uncertainty.
Whether the sterling or all European equities will rebound or plunge further will depend on central banks' monetary policies, as well as a host of political developments in Britain, the rest of Europe and other countries. By definition, these political events will be as unpredictable as the referendum itself.
In the U.S., stocks will probably act as a safe haven for equity investors around the world because of the safety of the dollar, a lower likelihood of U.S. rate hikes and the prospect that earnings will fall less than in other economies.
For institutional investors with international portfolios, key drivers for risk appetite in the coming weeks will pertain to U.K. and broader European political dynamics, how the Bank of Japan copes with further unwanted yen strength, and whether the recent stability in both oil and Chinese economic data hold.
The initial shock to the markets might amount to an asset price adjustment to the new realities of higher inflation and lower growth, and possible recession, in the U.K. Rising euroscepticism and political uncertainty also will hike the premiums demanded by investors for both U.K. and European risk assets.
Over the next six months, investors should gauge three main political events and global phenomena: the U.K. and Europe's next steps, central banks' effectiveness in deploying liquidity facilities and the extreme polarization on national issues represented by Brexit or even the U.S. presidential election.