If you’re anything like me, you woke up real early this morning blurry-eyed from trying to wait for the official results of the US Presidential Election last night. When I went to bed, the Dow Jones was down its maximum of 800 points, the USD was getting trashed against every other currency and I fully expected we would be in for a couple weeks or extreme negativity in the market. We were prepared for this in advance as we had made adjustments two weeks ago to all of our RADAR portfolios that would provide us security and flexibility, no matter the outcome of the election. The general consensus of economists and the media is that a Clinton victory would be extremely positive for the USD and stock markets in general, while a Trump victory would have been disastrous for the USD and would have created a severe downturn.
As always, we are concerned with the protection of capital first. Our Rules Based Investing allows us to invest with confidence. At the same time, short term losses due to unforeseen events such as a Trump victory, cannot be controlled and are no less painful in the short-term.
While I didn’t stay up late enough to watch Trump’s speech, I was extremely surprised to see that the markets – which had reached their maximum 5% decline on the futures market (800 points down on the Dow) – were only down 200 points when I clicked on Bloomberg first thing this morning. Additionally, the USD had recovered all losses and in some areas, more. Clearly, the economists and the over-hyped media had it wrong. Trump’s speech was conciliatory and calming. Regardless of individual opinion on Trump and Clinton, regardless of media hype and regardless of a rather shocking Trump victory, the markets always speak their own language and forge their own path.
We have spoken at length in our communication for many years that we are not influenced by the opinions of economists and the media, nor driven by emotion. It is important to stick to a process and not allow fear to guide decisions. As we look at the markets right now (9:00am CST), we see the markets reacting positively with the USD trending up. Again, this runs contrary to the reaction the market was expected to elicit following the possibility of a Trump victory.
It’s difficult to know what will happen in the short-term but rest assured we are ever attentive to protecting your capital in any market occurrence. We will provide further updates in the coming days.
Portfolio Manager, Director, Wealth Management
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