Election and the markets
It wasn’t the first shock experience of 2016 though. Only months ago did financial markets violently react to Brexit. The same thing happened following Trump’s victory. As votes were counted, the futures market halted trading last Wednesday when prices began to freefall. The next day, markets soared with what investors are now calling the “Trump-Bounce.”
Not only did Trump win the White House, but his fellow Republicans maintained control of Congress. Instead of legislative gridlock, we’re likely to see action across a lot of fronts offering investors a clearer picture of what legislation is likely to stay or shift as Washington changes power.
Winners and losers
Winners
Shale Oil, Shale GasLosers
ObamacareThe market’s honeymoon with Trump
What forces are better at readjusting to surprises than the markets? None. While some American voters are still working to feel more comfortable with the election results, many investors are closely watching the market’s reaction to the President-elect, betting on Trump’s businessman expertise to grow the economy. Wall Street’s positive reaction has even sparked speculation of a rally for the rest of the year.
Next steps to consider
- Embrace your internal Spock: Put aside any emotional response to the election. React hyper-rationally.
- Identify what your investment goals are and diversify accordingly.
- Remember: past performance doesn’t guarantee future success. Just ask the pollsters.
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