Investment Outlook, Post Election
So now we know. After a seemingly unending election cycle, we have a new president and some newly-elected representatives at the national, state, and local levels.
I want to congratulate Mr. Trump and his supporters on this win. I also want to acknowledge the disappointment of some other members of the electorate, including some of our clients who have expressed concern.
As of the market’s close on Wednesday, November 9 (the day after the election), the Dow Jones Industrial Average ended with a gain of +1.4% or 256 points. Many of us likely know that this upswing materialized out of the election night 700 point downturn in U.S. equity futures. We believe that this downturn was driven by surprise, concern, and a strong sense of uncertainty. We believe that the day-after-the-election gains were driven by a realization that things will change over time, and the future may take a variety of paths.
Here at Laurel Wealth Planning, we continue to believe that, when it comes to the economy, larger forces “trump” (forgive the pun) the actions of any one political administration, though that administration can certainly have influence. The next administration faces a rich U.S. stock market in the 8th year of an upswing. While we expect the U.S. and select nations to continue to modestly grow economically for some time, the next administration may well preside over a recession at some future point. This was our view before the Presidential election, and it remains our current view based on market cycle analysis.
Therefore, in terms of how we have been advising you, at the moment it largely remains “business as usual,” i.e., leveraging strategies that seek growth along with those that seek protection. In other words, we continue to focus on you and your goals, utilizing the risk/reward strategy we have identified in our discussions together.
We will, as always, continue to keep a close eye on developments that may influence your finances – and there are a number that may develop out of this particular election. Our Investment Committee, which brings almost 100 years of combined experience, is meeting next week to assess domestic and global investment trends and to identify our next recommended strategies for you.
As always, please do let us know your comments and questions.