Last night was very unsettling to many Americans. There are many issues in this election, but as your Chief Investment Officer, I am focused on your money and your investments:
- We do well when we separate our emotional reactions from our investment process. A first rule is to not make any immediate, knee-jerk moves in response to the election outcome. The US stock market is incredibly resilient, and a recent example is the market’s reaction to Brexit in June. After an initial, sharp drop, the market recovered within the month.
- After the initial shock of Trump’s victory, I believe the market is digesting Trump’s three top fiscal policy priorities:
- There will be corporate and personal tax reform. This is long overdue and has been stalled by gridlock in Washington. It is likely that Republicans who now control the three branches of government will be able to fix the policy that keeps $2 trillion trapped overseas in our large multi-national companies. Tim Cook of Apple said that as CEO he could not justify repatriating Apple’s foreign profits because the taxes due would be 40%. This will now change, and it will be good for the US economy and stock market.
- Trump will spend significantly on infrastructure; Caterpillar is up 7% so far today.
- The Republicans will roll back regulations. Not everyone will like how they do this, but it will benefit business in the near term.
Jim Bell, CFP®
Chief Investment Officer
President and Founder