The Trump or Clinton Effect - What Will Happen to Your Portfolio Come Election Day

The Trump or Clinton Effect - What Will Happen to Your Portfolio Come Election Day

Well the big day is here – on November 8th, Americans will head to the polls to cast their ballots for one of the most entertaining campaigns that I have ever witnessed. One thing is for sure, after November 8th, the US will either have the first female president in Hillary Clinton or Donald Trump the business mogul as president of the USA. I would like to highlight that I am neutral in this election and am solely looking to see what candidate would have the best chances in boosting my portfolio and creating a good economy. Don't think the election in the US doesn't affect us here in Canada - as so much of what we do hinges on the US in terms of exports and trade deals. 

 

                                                            Trump Vs Clinton

It seems that in every election the biggest topic is jobs and the economy. That’s good for Trump as in one of CNN’s polls, Trump has the advantage. However, Clinton leads in many of the other categories such as domestic security and immigration.

Trump: According to CNN, a Trump win will most likely sink stocks worldwide. This is because a lot of people are not expecting him to win. If he wins it will most likely come as a shock to many people and the markets would drop as well. Some analysts predict that this drop could be as large as 8%!!! Although Trump in my opinion offers the greatest unknown upside potential - he is unpredictable – which is something the market hates.

Clinton? Okay so what about the former Secretary of State?The markets would react in the same way but the drop would be less harsh at 4%. Because so many people believe that Hillary Clinton will win – the market has already priced this into the valuation of stocks. In my opinion, stocks will likely not pay out big gains – as it will just be a re-affirmation of what so many people had predicted.

What happens on Tuesday:

What’s important to note is that while the US elections will have a big impact on the stock market, the interest rates are an even bigger driver which is something else to monitor. Read my article on interest rates for more information. With the polls in flux and so many events happening this weekend with the Nevada rally and so on, I expect a lot of volatility going into Tuesday’s trading day as the polls will be swinging back and forth and people will be buying in fear. Fear is the biggest driver for the stock market and I expect people will be unloading shares in anticipation for the worst. The real damage will happen on Wednesday and Thursday where I anticipate some dips in the market as the markets around the world adjust to the next president. Although there may be some good opportunities on Tuesday that may seem tempting – I firmly believe that it is better to wait for the dust to settle on Wednesday and Thursday as this way you can see how the world markets react to the results as well. Wait around, I expect volatility going into the election but don’t panic there should be a plethora of opportunities in the coming week.

Disclaimer: All of the above information is my own personal opinion. Please do your research before making any financial decision. I anticipate that this week will have high volatility in prices so be wary of price swings in the market. Please consult with a licensed representative before making any financial commitment. 

For more info check out: http://money.cnn.com/2016/10/24/investing/stocks-donald-trump-hillary-clinton/index.html

Thumbnail Image: http://theweek.com/articles/622353/trump-vs-clinton-verdict-america

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