Trump Election – What Should Investors Do?

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A loud and aggressive Donald Trump may have ridden a wave of popular support from voters feeling disenfranchised and badly served by politicians to win the US Presidential Election, but investors should expect a calmer approach from now on.

Trump has nothing to gain from his unique bombastic approach to campaigning now he is in the hot seat.

As a businessman with no experience of public office or the armed forces, the world should expect to hear more lucid policy pronouncements from his team of advisors.

The certainty is investors will have a life after the election, just as consternation in the markets soon settled after the Brexit vote in June. Trump’s surprise arrival in Washington DC is an upset, but the world moves on.

Following the US election result, foreign markets stuttered but soon recovered, taking the unexpected victory in their stride.

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Ideas and vitality

Undoubtedly, Trump’s win will provide opportunities for investors to make money.

He will bring new ideas and more vitality to The White House.

Trump has revealed little about his policies for the economy, but investors do know from his campaigning that he intends to beef up the US military.

This should boost the value of companies handling defence contracts.

Hillary Clinton failing to win The White House is also good news for pharmaceutical companies. She proposed price controls that would have constrained profits.

Share prices for Shire, GlaxoSmithKline and AstraZeneca all rallied on the news.

Jobs and infrastructure

The one promise Trump has made is to create jobs by spending heavily on infrastructure projects from roads and bridges to schools and hospitals.

This is a massive fillip for construction companies and their suppliers.

On economic growth, Trump says he has a terrific plan that will double the GDP. He did not reveal how or when this might happen, but it’s fair to assume infrastructure will play a big part in his grand design.

The other expectation is Trump protectionism by raising import tariffs and revisiting trade agreements. His view is the US allowed other countries to take advantage of US workers and he has pledged to reverse the trend to ‘make America great again’.

Download a detailed post-election assessment of the US economy from Hermes Investment

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