Will Trump’s win affect UK investments?
10 Nov 2016 | COMMENTS: 0 | Author: Carlo Ruggiero | General
You’re probably still adjusting to the outcome of the US election. As mere spectators here in the UK, how will this affect us? You might be feeling very anxious right now. Or it might not concern you at all.
Political views aside, the news can’t be ignored when thinking about your investments. After all, the US is home to Wall Street, the biggest financial market in the world. Trump is the most inexperienced politician in US history to be elected president, so his decisions on US trade could have a domino effect on us.
A Trump market
As predicted, whenever a new president is elected, the market has dipped. Historically, profits tend to remain low for the first year under new presidency, regain strength for years two and three then dip again in the fourth year ahead of the next election. So the drop in the value of the dollar this morning wouldn’t usually be cause for concern.
But the difference with this election isn’t only that a rank outsider has won. His proposals are more radical and high risk than we’re used to, so predictions can only be speculative. Prior to the election it was thought that a Trump win would mean the markets wouldn’t recover so quickly. Interestingly, markets have already ‘calmed’ since his victory speech, which has been described as ‘gracious and unifying’ by Mohamed El-Erien, chief economic adviser at Allianz.
This anti climax may be welcome to the Stock Market at present, but the long term effects of Trump’s presidency could still go either way.
What will it mean for investors in the UK?
Though Trump’s presidency will lead to global economic uncertainty, analysts currently believe the impact on the UK economy will be limited. We may not necessarily encounter a negative impact either, as some experts believe the weakening of the US dollar will counteract the weakness of the pound brought on by this summer’s Brexit.
With an unpredictable power, comes an unpredictable future. What Trump’s presidency means for the rest of the world, and the UK, is yet to be truly felt. He may have pledged to ‘Make America Great Again’, but that soundbite doesn’t connect so deeply outside of the US. But, for now, UK investments shouldn’t be greatly affected. Always be vigilant though, and keep in touch with your financial advisor every step of the way.
If you’re concerned about your investments, speak with your financial advisor. If you are interested in being connected with an FA, we can do that for you.