Election Impact and Road Ahead

Stocks Drop on Trump’s Startling Victory reads the headline on the online version of the Wall Street Journal this morning. As the headline suggests, financial markets around the world appear to be a bit unsettled in the wake of Trump’s unexpected victory. At one point last night, when it had become apparent that Trump would win, but prior to his victory speech, U.S. stock futures were down nearly 5%. Futures markets have rebounded significantly and as of 8:15 this morning were only down approximately 1.25%. If the current price were to hold and the market were to open down by this amount later this morning it would still leave U.S. stocks in positive territory for the week following Monday’s and Tuesday’s gains.

Last night’s unexpected outcome and resultant market volatility has understandably caused many investors to question what Trump’s unexpected victory will mean for the economy and the markets going forward. Today, you will surely see (and hear from) a steady stream of pundits and market analysts confidently and clearly assessing not only why and how Trump’s victory happened but also what it means for the markets and the economy. While listening (or reading) this commentary, we ask that you please keep in mind that in the days leading up to the election nearly all of these same pundits projected a Clinton victory and dismissed a potential Trump victory has highly unlikely. This naturally raises a critical question: if none of these pundits saw Trump’s victory happening in advance, why should we place much faith in their after-the-fact assessments and, more importantly, their prognostications about what it all means for the markets going forward?

We continue to believe that investors will be well-served to avoid the temptation to make significant changes to a long-term investment plan based upon these sorts of predictions.  Based on data available at this moment, we are not proposing immediate changes to client portfolios but we will continue to monitor the situation and will reach out if our views change. 

Kathmere Capital Management Investment Committee

IMPORTANT DISCLOSURES

The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

Stock investing involves risk including loss of principal.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification and asset allocation do not protect against market risk.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Private Advisor Group, a Registered Investment Advisor. Private Advisor Group and Kathmere Capital Management are separate entities from LPL Financial.