Investors and the morning after.
The U.S. didn’t fire Trump. Here’s what it means for the markets.
Investors around the world – including Canada – have watched the U.S. presidential campaign over the past several months with interest, if not anxiety. Now that the results are in, how will the markets react? And what should investors do?
It’s a good question, particularly for Canadians. After all, the U.S. is Canada’s largest trading partner and the largest economy in the world. And, as our Prime Minister’s famous father once said, “Living next to the United States is like sleeping next to an elephant. When it shifts, we know it.”
Will Trump’s campaign promises come true?
Trump’s campaign against the Trans-Pacific Partnership and North American Free Trade Agreement (NAFTA) has negative implications for global trade, and more locally, our loonie. According to Global Affairs Canada, NAFTA has had an “overwhelmingly positive effect on the Canadian economy”, increasing trilateral trade within North America from $288 billion in 1993 to $1 trillion in 2015.
If Trump acts on his promised tax cuts, it could boost the U.S. economy for a short period of time, which is always positive for Canada. In addition, Canada’s oil industry could be affected by Trump’s support of Keystone and Iranian policies.
Learning the Brexit lesson
Most experts agree that, while markets will no doubt be affected to some degree by the election results, investors should see past the short term and remain focussed on their long-term plans. Case in point: just a few months ago, stock markets sank in the wake of the Brexit vote, and then bounced back in the weeks that followed.
Graham Walker, Senior Financial Advisor with Educators Financial Group, says, “Remember, for the most part you are investing for the long-term. If you are nervous about the short term effects politics may have on your investments, you may want to discuss the amount of risk you have in your current portfolio.”
Your Educators financial specialist is available to answer any questions about your portfolio, and to calm any ‘morning after’ fears you might have. To set up an appointment, contact us today at 1.800.263.9541.