The next couple of months will be full of ups and downs for investors as Donald Trump waits in the wings to become US President, according to a Yorkshire independent financial adviser.
Stephen Baxter, joint managing partner at Huddersfield-based Robertson Baxter, is urging investors to hold on tight, but believes things will settle in January next year when Trump’s policies become clear.
He believes that whilst the markets have rallied since Trump beat Hilary Clinton to the Whitehouse, the inconsistent nature of the President-elect means that the next couple of months are incredibly hard to predict.
“He’s already back-tracking on much of what he said during his election campaign, so until he’s in the Oval Office full time, we’ll experience a lot of market volatility in the short to medium term and that won’t subside until the end of January at the earliest,” said Mr Baxter, whose firm handles financial planning for high net worth individuals, charities and trusts across the region.
He added: “If the dollar strengthens, that will have a negative impact on inflation around the world. However, an increasing deficit and US inflation may result in a weaker dollar in the longer term which will affect commodities as most are priced in dollars.
“The introduction of tariffs will affect imports and exports which in turn could affect the profitability of global companies.”
And the result of Trump winning combined with our unexpected Brexit is likely to have a more direct effect across Europe. “Italy, France and Germany all have elections in the coming months and the rise of anti-establishment, popular nationalism movements, means populist uprising parties in these countries are probably feeling encouraged,” he added.
“It’s clear that whether you’re investing for security or growth, there are benefits in having a well-diversified portfolio. It pays to have your assets split over security and risk.”