What Does This Election Mean for Your Portfolio?

The roller-coaster of this year’s election ended last night with what most pollsters considered a surprise victory by Donald Trump. The Republican party is also in control of the House and Senate.

While stock futures were rocked overnight, as of this writing (12:30 pm EST on November 9, 2016) the broad American indices were in positive territory.

So what does this election mean for your portfolio?

First, whatever your politics, it’s important to recognize that half of American voters are elated right now and the other half are anxious. Fear has driven a lot of the news in this election cycle, and until there’s more policy certainty and a degree of predictability, we’ll likely see a continuation of that.

After all, there’s a lot for the market to process right now, and the implications of a Trump presidency aren’t fully priced in. That means we could see some more volatility going forward.

That being said, generally speaking, it’s better not to make too much out of post-election day volatility. Market moves on the November 9th after a national election aren’t predictive of the state of the market going forward – in fact, they’re no better than a coin toss.

But volatility also drives opportunity. I do believe we’ll see some strength coming back into the markets and in my prediction, we’ll even go to new highs.

What can you do now?

The appropriate course of action for you depends on your personal financial situation, your risk profile, and your time horizon. You might be better-served by staying the course in a diversified strategy or by strategically deploying cash.

Just keep in mind that no matter who you voted for, the American economy is resilient, diversified, and strong. That makes for good long-term prospects, in my view. I always urge my clients not to ride the highs too high or the lows too low. Instead, it’s important to step back from your emotions and have a plan.

I don’t have a crystal ball, but in my 24 years as a wealth advisor I can tell you that we’ve seen uncertainty and volatility before, and we’ll see it again. The market climbs a wall of worry, which makes prudent planning all the more important.

If you have any concerns, questions, or want to go over your strategy, please don’t hesitate to call. I’m available and happy to talk through this more thoroughly as it relates to your specific situation and needs.