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Investing in a new era — financial markets and the Trump factor

03rd February 2017

So it really did happen: Donald Trump is the new President of the United States, and never has there been a more polarising new US President. But whether you are pro-Trump or anti-Trump, the fact remains that many US voters, disillusioned with what they saw as the failings of many career politicians, voted for him — a man who, to say the least,  is direct in voicing his opinions, even though some of his views offend many people.

In the run-up to the American presidential election, the investment community voiced significant concerns that the economic policies espoused by Mr Trump were difficult to quantify and there was a particular worry that investment markets would react poorly to a Trump presidential election victory.

However, this has proved not to be the case and the Dow Jones Industrial Average recently attained an all-time high of more than 20,000 points.

So, from an investment point of view, what does President Trump stand for?
He has promised to reduce US taxes, both for companies and individuals, and is set on repatriating the significant funds currently invested overseas by American companies in search of lower corporate tax rates.

He has promised to spend significantly on US infrastructure including the national road network.

He has promised to abolish those current US regulations that he believes are significantly holding back businesses.

He does not favour trade deals with trading blocs, and has proclaimed himself more inclined towards trading arrangements with individual countries such as the United Kingdom.

As far as the UK is concerned, Mr Trump’s presidency could prove favourable, business-wise. With a Scottish mother, he is well-disposed towards us and appears keen to expand our so-called special relationship. He seems less enthusiastic about the European Union, and looks likely to consider the UK towards the front of the queue for a trading deal rather than at the back as Barack Obama seemed to indicate would be the case if Brexit were to materialise.

Accordingly, with a pro-business US President, we find ourselves in a wait-and-see scenario. Investors should perhaps focus more on the potential for investing under his regime than on his more controversial personal views. If you would like to discuss in confidence your financial planning options with a member of George Ide’s expert investment team, call us on for a conversation 01243 786 668.

John Atkinson. Wealth Manager.

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