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Mr. Trump will be President - Your portfolio will be fine

Quinn Waddington - Nov 09, 2016
You can’t say it wasn’t entertaining. No matter your political leanings, you were likely on the edge of your seat during last night’s election race.  At the end of the night, our neighbours have elected Donald Trump as their next President.

Mr. Trump will be President - Your portfolio will be fine

 

You can’t say it wasn’t entertaining.

 

No matter your political leanings, you were likely on the edge of your seat during last night’s election race.  At the end of the night, our neighbours have elected Donald Trump as their next President.

 

Although we did see some huge drops in equity markets around the world, by the time the markets opened this morning, sanity had prevailed and the markets were relatively flat.

 

I will give you a few insights below that may be a factor in your financial situation with Donald Trump and the Republicans taking power but the most important point I can make is that your portfolio will be fine.  That’s not to say there won’t be continued volatility as the details of what a Trump presidency will mean for the U.S. economy and the rest of the world, but a balanced portfolio with exposure to International, Canadian and U.S. stocks and bonds will ensure that your portfolio is protected if the stock market does crash.

 

I would warn against making any drastic changes to your portfolios based on what President-elect Trump may do or what an “expert” believes will happen as this could incorrectly adjust your portfolio based on hearsay, causing unnecessary damage.

 

A few other things that may come from these election results are a lower Canadian dollar and interest rates dropping or at least staying lower for longer.

 

With speculation about Mr. Trump’s stance on trade agreements and oil production, the Canadian dollar has already dropped over $0.01 and sits below $0.75/USD.  This trend could continue, at least in the short-term, until we get more facts about Mr. Trump’s plan of action.

 

The Federal Reserve was set to raise the interest rates in the U.S. again before 2016 is over, but they may be thinking twice about that now with worries that these election results could hinder the growth (albeit slow growth) of their economy.  Even if they do decide to raise rates slightly, I believe the Bank of Canada will wait to see how Mr. Trump’s presidency affects the Canadian economy before they pull the trigger on an interest rate hike.  If our economy begins to stall then a rate cut may even be put back on the table.  Your variable rate mortgages are probably safe for another 6-12 months.

 

I would be happy to discuss your portfolio or help with a financial plan to make sure you are on the correct path to your comfortable retirement and give you tips on how to make that happen.