A Donald Trump Presidency: What could it mean for investors?

November 11, 2016

Tuesday evening’s stunning election results temporarily turned markets around the world on their collective heads. Going into the elections, the markets had seemed to price in a Hillary Clinton victory in the race for president. However, from the time it appeared Donald Trump would be victorious to the market close the following day, the market had moved almost 1000 points. As our country now looks to a new administration, we try to make sense of what this unexpected result may mean for investors moving forward.

In weeks leading up to the election, polls were showing a decent lead for the Clinton campaign and markets had generally rallied during this time as more certainty of a Clinton victory was anticipated. However, Tuesday’s election outcome is the second time in 5 months that polls had called a major political vote dead wrong. In June of this year, Great Britain voted to exit the European Union, a move that no one had expected. The unexpected result of that vote sent markets in a frenzy for several days and the Sterling lost an unprecedented amount of its value. The people, and investors, were completely taken by surprise. Similarly, as the votes started to come in late Tuesday night, it became apparent that the race for the White House was going to be much closer than most had expected; in fact, it looked as if Mr. Trump may actually win. The possibility of a Trump victory sent futures contracts on the Dow Jones Industrial Average plummeting, and were down at one point more than 800 points. Futures contracts on the S&P 500 index and the Nasdaq had reached a 5% decline; which even triggered a temporary trading halt.

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