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Will Clinton or Trump Affect Your Portfolio?

The date is closing in on when the next leader of the world’s most powerful economy will be named. In a matter of 2 weeks, the new US President will be sworn in.

The journey has been long and the campaign has been brutal but it will all be over soon. For market participants, the ride has been bumpy. There were days of positivity and days of decline but one things for sure, it will affect you as a trader, one way or another.

The President’s Influence

Elections have long been a cause of volatility for the markets but the elected person himself is a big influencer.

1. Regulations

The elected President has the power to pass or deny regulations that impact businesses and thus the stock market. For example, the President can influence the nation’s spending and budget so that the other parts of the government such as the Congress will work with him.

2. Foreign Ties

The President is considered as the main representative of a country to the world. As the head of the most powerful nation, there is pressure to the US President to maintain ties with various nations to cultivate the peace, stimulate imports and exports, promote the tourism, and keep other economic factors in check.

3. Military Actions

What the President does with the military is a concern of the markets. This is because it can cause wars and instability.

The Effect on Your Portfolio

While the US President indeed has many powers that can indeed affect the markets, his influence can only go so far. For the long run, you don’t need to concern yourself too much on who becomes president. Because your portfolio is built to withstand short-term swings, who gets elected in November won’t affect you significantly.

On the other hand, what you want to worry about is the potential effect of not one great leader, but of one whole party controlling the executive branch and the Congress. This combination of power can allow the party to practically control the country by passing laws and creating bills that will affect the economy.

So whether the President is a Republican or a Democrat, your portfolio shouldn’t be affected much.

Created by : Samuel
Published : 13 Oct 2016

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