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Investment Implications of Trump Victory

Long Term Investment Implications of Trump Victory

Glenn Fairbairn
Director/Private Client Adviser
22 Nov 2016

As detailed in my colleague Nathan Lear’s recent blog titled ‘Hillary Trumped’, markets reacted wildly to the result of the recent presidential election, initially falling four per cent only to recover sharply the following day.

Over the past week, global markets have continued to react positively off the back of hopes that President Trump will introduce a pro-business agenda and unleash $US 500 billion of infrastructure expenditure. So, what exactly does a Trump presidency mean for the long term?


  • A US presidential term is four years, meaning that a Trump presidency is not permanent. As long term investors, we encourage avoiding short-term fear and instead continue to invest in high quality assets with sound cash flow.
  • Negative sentiment and heavy selling is often driven by fear of what might happen. Historically, this has created the best opportunities for long term investors to purchase assets at significant discount compared to fair value.
  • With Trump arguing that existing trade deals are unfair to US workers, one significant concern is a possible disruption to global trade which has the potential to further hamper global growth.
  • Trump’s plan to lower taxes and increase infrastructure spending is likely to boost gross domestic product (GDP) and corporate profits, which in turn would be good for stock prices.
  • Trump’s proposal of lower taxes and higher infrastructure spending would likely increase federal debt levels and result in higher interest rates in the US. This may put pressure on bond prices and result in a weakening of the Australian dollar against the US Dollar.

Despite all this – as always, our advice is to remain calm. While short term market volatility can be unsettling, it is important to stick to your strategy and focus on your long term goals.

The information provided above is general information only and individuals should seek specialised advice from a qualified financial adviser. Please contact Hewison Private Wealth for more information.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.