Statue of Liberty: investment opportunities in the wake of Trump

US election response matters

In Political Diligence, Thought Leadership by Fleur HicksLeave a Comment

Many investors and fund managers had hoped that the surprise Brexit result was a one off.  It couldn’t possibly happen again, could it?  The underdog pulling on the emotive strings of the populist vote above reason, logic and to some extent humanity.  And that’s before we get to the details of international trade relations, internal budgetary assignments and the knock-on effects on consumer and industry.  The manifestos of which were frequently advised against by experts.

But, the underdog won the democratic vote.  Again.  Trump won the US election.

So, what will this mean for the financial markets worldwide?  Here we have some initial responses from the world of finance, nicely summarised by the Financial News:

Good news for the UK:
“What a year, I’m speechless. Uncertainty is always an opportunity. The UK is looking like a safer haven today than it did yesterday.”

Jeremy Hand, managing partner, Lyceum Capital

Sobering realisation as to how we are already divided as nations:
“The results this morning shows that the professional classes are completely out of touch with ordinary working people. This has been demonstrated both in this result and with Brexit…I don’t think this election result will have much impact in the UK. For the UK it’s far more important what will happen in 2017 with Brexit.”

Garry Wilson, managing partner at turnaround firm Endless

A warning of investment turbulence:
“We are heading into a world of unprecedented political risk which calls into question the pillars of the post WWII settlement. It’s unsurprising investors are heading for cover. The immediate sense of bewilderment at the shift rightwards in American politics will need to give way to a more sober risk assessment.”

Dominic Rossi, global CIO equities, Fidelity International

And a call for calm:
“A lot of this selling will be irrational, though. Now is the time for cool heads. The US remains the country from which virtually all disruptive technology over the last 50 years has emerged; where the rule of law is sacrosanct; with relatively favourable demographics; and broad and deep pools of capital. None of these things have changed as a result of events overnight.”

Richard Dunbar, senior investment strategist, Aberdeen Asset Management

One thing is clear – what we don’t know about the upcoming consumer, financial and investment markets can present an opportunity if we respond calmly, watch closely and assess diligently.

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