2024’s US presidential race was gripping, dominating headlines around the world. After months of speculation, no less than two assassination attempts, and President Biden’s withdrawal, Donald Trump’s victory over Kamala Harris was decisive.
Trump won the election and the popular vote – which he failed to do in 2016 – to comprehensively confirm his return to the White House and allay some market uncertainty.
Trump’s inauguration on 20 January will mark the start of his second and final four-year term. But what might those four years mean for global markets, the UK economy, and your own financial plans?
Keep reading to find out.
Election years can mean increased volatility but the decisiveness of Trump’s victory helped markets initially
President Trump’s election win caused trepidation in some quarters, not least because it came off the back of criminal convictions earlier in the year, but US markets reacted favourably.
Despite some market unrest in August, in part due to fears of an imminent recession, markets rallied. According to Fidelity, the so-called “Trump Bump” saw the S&P 500 rise by almost 5% in the five days following the result.
CNN Business confirms that the S&P 500 grew by 44% during Trump’s first term (up to 28 October 2021) but, as we well know, past performance is no guarantee of future success. With the S&P 500 already close to an all-time high, he might struggle to see such impressive returns this time around.
Interest rates also remain high, meaning higher borrower costs for businesses with a knock-on for growth and returns.
Whatever happens in the US, the effect of Trump’s win will be felt further afield. He looks set to continue with the aggressive foreign policy that characterised his first term, with steep tariffs already announced, especially for China.
Deregulation is likely to be a theme, with oil and natural gas producers the likely beneficiaries, as well as the financial sector. Green and sustainable industries will fare less well.
Forecasters are split on whether Trump’s approach and likely policies, will dampen or encourage US growth. Either way, they’ll be a knock-on for global economies.
With the Republicans controlling the House and the Senate, Trump will be free to chase his own agenda. This could mean lower taxes and less regulation. That will generally be good news for US markets, at least.
What to do: Have a diversified portfolio ignore the noise and stay focused on your goal
There are several points to consider when deciding what the result of the US election might mean for your long-term investment and financial plans.
Firstly, remember that broadly speaking the markets don’t care who wins an election. They generally trend upwards and have done so historically despite many elections and changes in leadership.
The global noise of events like elections and Budgets, and even conflicts, will cause short-term volatility. It is for this reason that your investment goals are longer-term. Be prepared to be patient, keep emotions out of your investment decisions, and focus on the long term.
Finally, remember that your investment is diversified across asset classes, sectors, and geographical regions. Events in America may well have ramifications for world markets, but diversification spreads risk. We’re on hand to provide reassurance that your plans remain on track and make any changes that might prove necessary.
Get in touch
If you have any questions about your long-term retirement plans, speak to us now. Get in touch by emailing hello@fingerprintfp.co.uk or calling 03452 100 100.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
