At last. The long awaited decision on America’s 45th president has been decided. But regardless of whether you were Team Clinton or Team Trump, now’s the time to take a closer look at what you are holding in your portfolio. In the below, we outline our thoughts on positioning for both the short-term and the long-term using Exchange Traded Products (UCITS ETFs and Exchange Traded Notes). For more detail driving our initial investment view, read our US pre-election blog, “Allocating for a Trump or Clinton win.”
We have yet to see how exactly Trump plans to handle key issues like immigration, foreign trade and US defence.
Figure 1: More volatility in the near term
In the short run, tactical opportunities are aplenty
The message to investors is to be prepared: volatility will continue in the short term, so hedge your broad exposure in equities and think about retreating back to safe havens – like gold. The highly anticipated rate hike might be put on ice so US Treasuries may become more attractive. Over the longer-term, we should see US equities gaining appeal.
Figure 2: The tactical view
And in the long run…
As Trump is likely to look inwards toward the US economy, this should result in stronger domestic growth. Investors may consider a US small cap equity strategy and a US quality dividend strategy like the following:
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