Following the election of President-Elect Donald Trump yesterday, the unknowns surrounding a Trump Administration are considerable. We recognize that this uncertainty feels scary to those who did not vote for it. Although we cannot address all the potential ramifications of a Trump Presidency here, or the ultimate effect on our country, we can address what we know about the financial markets.
Watching the US markets drop overnight, only to recover this morning, goes to remind us that the markets react in unpredictable ways to unexpected events. Now that the election is over, market participants will have time to review and assess the impending Trump Presidency, and evaluate whether America’s corporations are worth more (or less) than they were before election night.
Because there are so many unknowns surrounding the Trump Presidency, much remains speculation at this point. The most important thing to keep in mind as the election outcome begins to sink in is that removing emotion from the investment process has always been critical to long-term success. Our advice to investors is to not presume that this political change will negatively affect the long-term success of diversified portfolios.