So, its happened again. The polls were wrong, the betting was wrong, and the markets were wrong. Donald Trump is now the US President elect.
No one can change anything and, now, we will have to watch to see how things pan out.
However, many of you will be wondering how the result might impact you and, in particular, your investments. It is no secret that investment markets dislike uncertainty and, so far, 2016 has been packed with uncertainty, prompting relatively high levels of volatility.
Trump’s victory is predicted to produce a sharp negative stock market reaction, not only in the US but globally. Today we have already seen some significant sales in global equities, with the S&P down 5%, whilst gold and the Japanese Yen rallied strongly. Somewhat understandably, the Mexican Peso lost over 10% of its value. However, so far this morning, the impact on the FTSE 100 has been marginal.
Periods of uncertainty such as this reiterate the importance of holding a globally diverse portfolio, tailored to your individual circumstances and personal risk tolerance.
From this perspective, we remain confident that our clients’ investments are well positioned to ride out any market turbulence.
On a positive note, if, in the longer term, Mr Trump manages to do even half what he wants economically it means more growth for the US and therefore globally. That’s good for everyone.
At Magenta, we remain focussed on our long term investment philosophy: we invest rather than speculate.
Your investment portfolios are constructed with a view to maximising your lifetime purchasing power and not chasing short term speculative gains. We don’t advocate market timing and therefore it would be inappropriate to trade around the current market volatility.
There are so many scenarios that could materialise that is hard in the immediate term to predict where we may see winners and losers. However, as these scenarios take shape and develop over the coming months, we will of course seek to identify any long term investment opportunities, with the guidance of our third party investment specialists.
If you have any concerns and would like to talk to us, please do not hesitate to call us on 01656 760670.