Markets are likely to be unsettled following Donald Trump’s victory in the US Presidential election. The FTSE 100 opened at 6,843 and dipped briefly below 6,700 in early trading this morning but has since stabilised. We are not short term investors and remain positioned in high quality, actively managed funds which we consider to have good medium and long term prospects in comparison to the market in general.
The result is likely to have implications for other investment markets and this morning has seen meaningful changes in currencies and bond markets.
It will take some time for Trump’s policies to become clear and a series of radical policy reversals both domestically and abroad are possible. On the other hand due to the checks and balances inherent within the US political system on a historical basis previous Presidents have only been able to enact around 25% of the pledges they made on the campaign trail once they are in office. It is also important to keep in mind that whilst politics are an influential factor for financial markets investment returns can be affected by many other factors including central banks’ actions, commodity price movements, and most importantly from the point of view of stock pickers – corporate fundamentals.
The policies which would probably have the most influence on US and global financial markets centre upon trade, healthcare and tax…