Late Tuesday afternoon, most people, regardless of party affiliation, breathed a sigh of relief that the 2016 election was over and things would return to normal. As we now know, that is not what occurred. The polls proved wrong and Donald Trump won an historic victory and Republicans maintained control of both the House and Senate.
As in the Brexit vote, the financial markets initially dropped dramatically. However, at 2 AM President –elect Trump made a speech that was very conciliatory in both words and demeanor. His speech provided some hope that his administration would work cooperatively with Democrats and Congress on items such as tax reform, and the markets began to recover.
While the market rebound is encouraging, the election of Donald Trump raises more questions than answers such as:
Our questions are unlimited and we will be watching both the President-elect’s words and actions closely for clues to the answers.
Nothing has fundamentally changed our economic outlook. The United States economy continues to grow albeit slowly, propelled forward by the ingenuity and the work ethic of the American people but constrained by a large government bureaucracy and increasing regulation. Although (due to those constraints), our economic growth is weak by historic standards, it remains stronger than many other developed countries, and provides reason for optimism.
As imperfect as our democracy is, it has survived many crisis and we view the current election of an untested Presidential candidate as just a bump in the road.
We believe that our portfolios are well positioned for, although certainly not immune from, the current volatility. We will be watching both words and deeds coming from Washington for clues to what lies ahead. At the moment we do not have any portfolio changes planned. However we will continue to monitor the markets and will make any adjustments we believe necessary.