After months of increasingly controversial and bitter campaigning, the 2016 US Presidential Election reached a dramatic climax, culminating in a surprise victory for Republican Party candidate Donald Trump. The Republican Party retained control of the US Senate and the House of Representatives. Generally, investors had been expecting a narrow victory for Democratic Party candidate Hillary Clinton; therefore, Trump’s unexpected victory initially threw markets off balance.
The price of oil fell and equity indices initially dropped in response to the news that Trump was the new President-elect, although their fall was generally less pronounced than it was in the wake of the Brexit vote in June. Then we saw markets make a swift recovery later that day.
A few days later and there still seems to be some uncertainty. Overall our client’s portfolio valuations have seen fluctuations but on average they have remained positive.
Looking at the short-term future, the rollercoaster ride looks as though it may continue. Especially as the UK’s Chancellor of the Exchequer, Philip Hammond, prepares his Autumn statement in a couple of weeks, shortly followed by the next meeting of the US Federal Reserve (Fed), in December, when policymakers decide whether to implement a rise in US interest rates. Overall though, our clients’ portfolios are very diversified and well positioned to ride out the uncertainty. Looking ahead, as the world heads further into uncharted territory, we would encourage investors to take a “wait-and-see” approach.
As the wind direction becomes clearer we will continue to ensure our clients are well positioned for the future.
As always we are here to help. Do not hesitate to contact us if you have any concerns or queries regarding your financial plans.