With Trump back in the White House, we anticipate a focus on tax cuts, deregulation, and protectionist trade policies. This “America First” stance introduces market volatility, making a diversified investment strategy essential to navigating upcoming shifts. Key opportunities and risks include:
- Economic Growth & Inflation: Tax cuts aim to boost short-term growth, but could deepen deficits, pressuring long-term stability and increasing inflation risks.
- Sector Impacts: Energy, financials, and manufacturing are set to benefit from Trump’s policies, while high-growth sectors may face valuation risks. Small-cap stocks and cyclical sectors could perform well in a supportive domestic environment.
- Geopolitical & Trade Risks: Tariffs on imports, especially from China, may disrupt global supply chains and strain emerging markets. Diversified exposure can help manage these risks.
- Currency & Gold: A strong US dollar may strain emerging markets, while inflationary policies could support gold as a safe haven.
- Crypto & Bitcoin: Trump’s potential support for crypto could drive interest, though regulatory ambiguity persists.
- Elon Musk’s Influence: Musk, a Trump supporter, may see influence in deregulation efforts and tech policies, possibly benefiting sectors tied to his ventures.
A balanced, fundamentals-driven approach will be key to weathering volatility. Avoiding reactionary moves, diversifying across asset classes, and maintaining agility will best position portfolios for what lies ahead.
For a detailed analysis of Trump’s return to the White House, see below the Trump Impact and Considerations information sheet.
Document courtesy of John Haslett of Graphite Asset Advisory.
