Will Trump’s Presidency Affect My Long-Term Investments?
Will Trump’s Presidency Affect My Long-Term Investments?
November 8, 2016, may go down as one of the more emotionally charged days in American history. Whether it was the moods of voters, positive or negative, as they slowly realized Donald Trump would become the 45th President of the United States, or the stock market, there were certainly many ups and downs in the 48 hours surrounding the election. And while many investors felt their hearts drop at the initial plunging of the market on election night, like the market dive, their worry was short lived. What felt like global panic throughout the night as the Dow plummeted nearly 900 points turned to jubilation and an emphatic welcome to our new President-Elect as the Dow soared 257 points, almost reaching record highs, by the time investors had their mid-morning snacks on Wednesday. That being said, do investors have much to fear from a Trump Presidency?
Ultimately, no. While Mr. Trump may enact or repeal policies that cause some changes in factors such as deficits, trade reform and taxes, his election alone should not send investors (and their investments) running for the hills. Take, for example, a situation like Brexit from this summer. Similar to our recent election, the London stock market and many others around the globe fell drastically when UK voters backed the withdrawal from the European Union, but were quick to bounce back, and have yet to fall so drastically since.
Thus, markets are often cyclical, and our economy is not destined for long-sustained ruin. Factors such as market valuations, business cycles, interest rates and corporate profits will affect the economy more than President-Elect Trump’s policies and views. Currently, real estate prices are firm, interest rates are exceptionally low, unemployment rates are maintaining below 5 percent, and energy costs are also relatively low. These factors, combined with a pro-growth agenda and lower regulations from the Trump administration, should support the stock market and economy in the long-term.
Investing is a process. It is all about planning and considering a variety of factors, from expected cash flows to risk tolerance. Occasionally, this means temporary losses. Ultimately though, a combination of patience, persistence and good planning will “Trump” short-term losses, and reap a multitude of benefits for investors.
If you have any questions about how proposed policies may affect you or your investment portfolio, please consider contacting me or your representative at Brammer & Yeend Certified Public Accountants with any questions.
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