DeCesare Retirement Specialists

Work to Wealth

Shock & Awe: 2016 Election

| Work to Wealth

History was going to be made last night one way or another. Would we elect our first woman President? Our first nonpolitician President? However, based on the experts, the pundits, and the polls, this election was a formality. We would all participate in the process and go through the motions, but in the end the heavily favored candidate would surely be the victor. But, as I wrote in June’s Newsletter after the Brexit referendum, this is why they play the game.

The country awoke to one of the most unexpected, unprecedented, and surreal moments in our country’s history, a Donald Trump presidency. A truly shock and awe moment. An unlikely outsider with no political experience won the nomination for the President of the United States against a seasoned political veteran in Hillary Clinton. Ultimately, the electorate spoke and they chose an unconventional candidate that challenged the establishment and the status quo.

The initial market reaction to the realization that Trump would win the presidency was sheer terror. The futures markets traded so low that the circuit breakers were triggered to allow the markets to cool off prior to being brought back online. Correspondingly, bond yields plummeted and gold spiked as traders ran to safe havens. But after Trump was announced President-elect and during his acceptance speech, the uncertainty that spooked the markets eased dramatically.

The initial market reaction to the realization that Trump would win the presidency was sheer terror. The futures markets traded so low that the circuit breakers were triggered to allow the markets to cool off prior to being brought back online. Correspondingly, bond yields plummeted and gold spiked as traders ran to safe havens. But after Trump was announced President-elect and during his acceptance speech, the uncertainty that spooked the markets eased dramatically.

Interestingly, this morning’s anticipated weakness quickly turned into enthusiasm as the markets received Clinton’s concession speech and President Obama’s encouraging words for the smooth transition of power. Ultimately, some uncertainty has been relieved for the time being. However, after the dust settles, the future is still highly uncertain as the incoming president will be faced with economic challenges that have plagued this country’s and the world’s economy since the great recession. The hope is that Trump’s business acumen can prove useful in managing another unprecedented event in recent history, the unconventional and coordinated central bank monetary policy that has been in place since 2006.

If you have questions or concerns about how your investments are or should be positioned, please feel free to contact me at 856.235.3830 or Steve@DeCesareRetirement.com.