After the presidential election and its surprising results, I offer a brief note on the financial implications.
Donald Trump’s victory will create uncertainty in the financial markets going forward but at the same time in the near term create certainty in the form of a final outcome after many distressing months of ugly debate. Regardless of your politics, market price movements ahead may be a cause for anxiety, so I wanted to reiterate that we have a strategy, which doesn’t dwell on panic market moves, works to address potential pitfalls along with opportunities. I don’t think this moment is an occasion to speculate on investment sector winners and losers. A Trump presidency can mean many things, so I believe that guessing who gains and loses at this point is premature and unproductive.
If you are feeling anxious about your investments and want to talk, call or email me your concerns and I will respond. We will focus on your personal investment situation and plan.
I had a few non-market thoughts after hearing the results, but prior to reading or hearing any commentary. They are both neutral and hopeful.
Half of US adults are very unhappy about changes in the US that have at best unsettled them and at worst hurt them. These changes include loss of manufacturing jobs, an array of new jobs that they don't qualify for, high health care costs, and demographic shifts that bring outsiders into their neighborhoods. They hope to return to a position of security they have lost. Many of these adults don’t speak up, e.g. to pollsters; but this time more of them voted. If the employment rate was really as low (4.9%) as reported, Trump would not have won.
In addition, the voters for Trump include a wider movement of people that just want change, are philosophically against redistribution of wealth, porous borders and big government in general.
The elites in politics, the press, academia and Wall Street paid little attention to them, so missed how much they hurt, how many of them there are, and how many would come out and vote. The elites didn’t take Trump seriously so they didn’t take his voters seriously.
Hillary Clinton had too much baggage to capture all of those who voted for Obama; he had advantages she lacked, i.e. he was an outsider, not part of the establishment, not wealthy, with no classified e-mail or influential Foundation issues. In addition, the vitriolic dislike of her by many helped mobilize Trump support.
It is good that voters in the US have an orderly way to change political leadership. When that way is not available, there can be an armed uprising, e.g. Syria or Egypt.
My expectation is that this new administration will find it difficult to reverse most of the changes that are hurting Trump voters because of how the world is developing. Democrats and the elites have great power, and will not help these Republicans much. The Republicans do not agree on what to do. Unfortunately, an electorate craving something better is unlikely to get a quick fix.
Meanwhile, life goes on, and our country will go on with it. As we approach Thanksgiving, I find myself reflecting on my blessings, and I’m very grateful to live in the US. We face tremendous challenges, but have unparalleled opportunities. This gives me some optimism.
There will be more specifics to write about later.
Linda A. Mundy, President