Forget Trump, let's talk about America
That was a heck of a night. I know tempers are still high and reactions are still being emotionally digested but I’ve learned a lot of lessons from the game of golf that help me deal with situations like this in life. Dr Bob Rotella said this: “Golf is about how well you accept, respond to, and score with your misses much more so than it is a game of your perfect shots.” Like in an election, not everything occurs in your favour and the best we can do is to accept, respond to, and position ourselves to take advantage of any market condition to “score” financially. Let’s put down our verbal stones, step out of our political strong holds and talk about what this election will mean for the economy for a moment.
To start I want to note an important key to the US government. The founders of the Constitution put Congress, the Senate, and the Supreme court in place to act as checks and balances to keep the best interests of the people their focus and prevent the abuse of power by any individual elected branch of government. President elect Trump has made many claims that would greatly affect the economy but none of his decisions will catch the markets by surprise. He will announce it, present it to the Senate, allow it to be voted on, and need to get it passed before any of those decisions will take effect. During that time, we easily have enough notice and preparedness to make changes to investments as needed.
America’s economy is strong and getting stronger. I sat with an investment advisor with over a trillion dollars in assets under his management and he said that the “S&P 500 is up %300 since 2008” and “America’s economy is the strongest it’s been since 2006”. Those are huge facts. I firmly believe that America will have strong returns and should be a part of portfolio for growth in the next 12-24 months. However, there are a few areas of Mr. Trump’s campaign that could derail this opportunity. If he able to disassemble NAFTA there will a deep impact on the Canadian economy and our trade agreement with the US. If he can build a wall, Canadians will obviously feel the effects of a decision like that (although it takes workers, steel, and concrete to build that wall so the economy would benefit and no wall stops us from investing in the US economy).
When it’s all said, and done, America remains one of the largest players sitting at the world markets table. This is evidenced in the fact that the S&P futures lost 5% on Tuesday night (the start of the ultimate demise of America's economy) but recovered before midday on Wednesday morning and actually surged in growth by the afternoon. America is resilient and no matter if you love or hate Mr. Trump the reality is he's a business minded entrepreneur and economic strength is his intent. I am again reminded of Warren Buffets wise words “be fearful when others are greedy and greedy when others are fearful.” There’s always opportunity in your portfolio, let’s find it and strike while the iron’s hot.