Trump victory: Buckle Up for a Bumpy Ride, but Expect Financial Opportunities
Prior Consultancy – Trump winning the U.S. presidency is a bigger deal than Brexit, expect enormous volatility, but also important financial opportunities, affirms the boss of one of the world’s largest independent financial advisory organizations.
The observation from Nigel Green, founder and CEO of deVere, comes as multibillionaire real estate mogul and reality TV star Donald Trump wins the race to the White House to become America’s 45th president.
Mr Green comments: “Buckle up for a bumpy ride in the global markets. Whether President Trump will, in fact, do what he has said he will do throughout his campaign, or whether it was just soaring rhetoric to whip up his support base, for now, Trump winning is sending shockwaves across the world. As such, enormous volatility can be expected in the markets.
“The Brexit result was a real shock and created instability in the UK. But this is a far bigger deal as this creates instability on a much wider, international scale.
“The markets’ main concerns include Trump’s protectionist policies, focusing on potential trade wars with China – America’s largest trading partner – and with Mexico, it’s third largest.
“In addition, with Trump having said certain countries are ‘cheating’ due to their undervalued currencies, currency tensions should also be expected.”
He continues: “Whilst some people are put-off investing because of volatility, many of the most successful investors welcome it. This is because major buying opportunities are always found where there are fluctuations.
“Fluctuations can cause panic-selling and mis-pricing. High quality equities can then, for example, become cheaper, meaning investors can top up their portfolios and/or take advantage of lower entry points. This all, in turn, means greater potential returns.
“A professional fund manager will help investors take advantage of the opportunities that volatility brings and mitigate potential risks as and when they are presented.
“Anyone serious about enhancing their finances should be using this somewhat unexpected turn of events to create, maximise and protect their wealth.”
Mr Green concludes: “As ever, the best way to benefit from the inevitable key opportunities and sidesteps risks is through real diversification – this includes across asset classes, sectors and geographical regions.”
Yesterday, the deVere CEO said: “With a Trump win we can expect in the immediate aftermath a double whammy negative impact on the market.
“This is because the likely sell-offs will be compounded by the markets having priced in a Clinton victory and were wrong.”
Carney said EU firms would face capital charges as much as ten times higher than today.
Brexit-related events have had a significant impact on the FX market.
Systemically important CCPs may have to be located in the EU.
Introducing a more pan-European approach to the supervision of CCPs.
The surprise result of the UK general election affected foreign exchange volumes.