All roads lead to June 23 in Europe as the United Kingdom votes on whether or not it will leave the European Union in what will be a volatile day for global equity markets.

The S&P/ASX 200 (Index: ^AJXO) (ASX: XJO) is already down nearly 4% this week as institutional investors begin to take the prospect of a leave vote more seriously and recent opinion polls suggest the outcome will be extremely close.

The latest general election result in the UK also suggests a leave vote could happen and I’ve not been surprised to see the bookmakers slash their odds on this scenario over the course of the past month.

If it does happen a leave vote is almost certain to inflict short-term pain on global equity markets as it will create a flight (or mass migration) to safety scenario already being rehearsed on a small scale where yields on risk free government debt tumble and the gold price soars. Moreover, if the powerful global asset managers lose their appetite for risk and equity buyers disappear then share prices will have nowhere to head but downhill across the world.

A Brexit vote would also leave the EU just one step from complete implosion as if another member state decides to follow the UK’s example it could be the end of the single market and monetary union across Europe.

This trade and productivity decimating scenario is the main reason I suspect institutional equity buyers will go deep underground in the event of a leave vote as the potential consequences for the US and Asia as Europe’s major trade partners are also serious. In Australia I expect the ASX could easily fall more than 9% from here to below its one-year low of 4707 points recorded back in January.

For Australian investors that means stocks across the board are likely to come under downward pressure with international capital-markets facing businesses such as Macquarie Group Ltd (ASX: MQG), Platinum Asset Management Limited (ASX: PTM), Henderson Group plc (ASX: HGG), AMP Limited (ASX: AMP) and BT Investment Management Ltd (ASX: BTT) especially vulnerable.

Aside from holding cash the best place to hide when equity markets fall is amongst reasonably valued defensive income stocks such as Telstra Corporation Ltd (ASX: TLS), Westfield Corp Ltd (ASX: WFD) or Scentre Group Ltd (ASX: SCG).

The gold price is also likely to rocket and take the share prices of ASX-listed gold miners like Newcrest Mining Limited (ASX: NCM), Northern Star Resources Ltd (ASX: NST) and Silver Lake Resources Limited (ASX: SLR) higher with it.

I would not recommend speculating on gold though as buying and holding quality companies over the long term is the best route to serious wealth creation and if a Brexit vote does trigger big market falls smart investors should see this as an opportunity to buy quality stocks, not sell in panic.

Never let movements in your investments control your own behaviour as this will likely result in buy high / sell low results, while if you control your behaviour irrespective of short-term market swings you are likely to develop a successful buy low / sell high wealth-creating investing habit.

And whether share markets are up or down you cannot beat BIG dividend stocks

Discover The Motley Fool's top 5 ASX dividend stock ideas for 2016 to get you started building a more diversified income portfolio that is paying you back! Click here to learn more.

The report is free! No credit card required.

HOT OFF THE PRESSES: Motley Fool’s #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.

Motley Fool contributor Tom Richardson owns shares of Macquarie Group Limited.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.