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2016 Presidential Election Results
In a surprising win, Donald Trump is set to be the next president of the United States. Similar to the Brexit vote in Europe this summer, there will likely be some short-term volatility as markets digest these unexpected results. As we all know, the global bond, stock and currency markets are “forward-looking machines” that price in future expectations. Historically, one of the main catalysts for short-term volatility is surprise events that were not expected and therefore lead to uncertainty. We can tell you that over the last nine months, the markets have been pricing in (expecting) a Hillary Clinton win – so the resulting Trump victory was unexpected, leading to a variety of uncertainties in politics and global economics.
Hopefully you didn't watch the stock market futures last night (as we did), but as the votes were coming in, the Dow lurched from flat to down roughly -800 and then rallied back to a current -325 (at the time of this writing at 4 a.m.). While this confirms the expected short-term volatility ahead, we want to reiterate that this repricing is not due to the state of our economy, our current employment (which is robust), or our growth prospects – as Trump’s proposed policies will offer varying opportunities as well.
While we also expected a Hillary Clinton win, for months we have been researching what particular sectors of our economy were likely to perform well regardless of who won (see our most recent Entryway). As the days unfold, we will continue to play defense where needed and look for longer-term buying opportunities. If we feel changes are necessary we will be ready to make them; however, as long-term investors and an eye to the future we feel well-prepared to handle this current noisy environment and help you navigate for the longer term.
If you have questions or concerns don’t hesitate to email or call.
Your Red Door Team
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