Originally published in The Street

By Debra Silversmith

Let’s forgive investors around the world for their shell shock.

No one saw the U.K.’s decision to leave the European Union coming, not the politicians, pollsters, public or pundits.

Even Nigel Farage, the pint-toting leader of the U.K. Independence Party, predicted, just before officials tallied the ballots, that his “leave” camp likely would narrowly fail to win a majority in the historic referendum on EU membership.

But the steep drop in most global markets on Friday, following U.K. voters’ eyebrow-raising decision to leave the EU, wasn’t so much a black swan event as an ugly duckling.

After all, the U.S. stock market ran up sharply in the trading sessions before the vote, and Friday’s losses were partially a retracement of those gains, albeit a violent one. Although, the S&P 500 dropped 76 points, or 3.76%, on the final day of trading last week, it only lost 34 points, or 1.6%, for the entire week.

Even in the U.K, the FT-SE 100 Index dropped 4.31%, a bad day but not a disaster.

Some European markets fell much more, in Greece losing more than 13%; in Italy slipping more than 10%; and in Spain dropping more than 12%. But these nations also have troubled economies.

In other words, this isn’t a Lehman Brothers Holdings-type event.

Will there be economic ramifications? Absolutely but not of the magnitude that lead to a global recession.

The risk of a spillover from the Brexit and the problems that it will produce in Europe also won’t likely swamp U.S. shores.

Stocks could fall further, of course. The S&P 500 has moved into negative territory for the year, with continued selling on Monday.

In addition, the dollar’s strength could trim corporate profits for multinationals with large European exposure.

However, the risk of a bear market or a recession this year is low.

Indeed, the U.S. may become even more of a haven for investors because of the global uncertainty. Stocks aren’t cheap, but they aren’t highly overvalued, either, especially after Friday’s pullback.

Bond yields remain minuscule, but, for those focused on safety and capital preservation, bonds are the ballast in portfolio.

Global economic risks and a rising dollar probably will prompt Federal Reserve Chair Janet Yellen to refrain from increasing interest rates, at least until the Fed’s September meeting or in the fourth quarter and even then, only if the economic is picking up steam.

And, politically, the British vote was, in large part, a referendum on globalization and immigration, issues that have been fueling populist movements around the globe.

As a nation, we need to watch closely the ramifications of these issues in other European countries as well as here in the U.S.

Unfortunately, investors, as they are wont to do, react too much emotionally when faced with the kind of tumult seen Friday.

De-risking a portfolio, cutting equity allocations to some degree, may make sense, given that it is late in the economic and stock market cycles. Wholesale panic selling, however, doesn’t.