Dear friends ... last night like earlier moments this year have brought worries, wailing, and a “wake me up when it’s over” routine. As we’ve seen along the way, 2016 has continued resiliently profitable. There was a critical opening 6 weeks of the year with an Asian Currency crisis, which recovered by mid-February. in June all predictions of Brexit failed and markets wasted for a few days. Regardless, 2016 has sallied onward and upward for us.
The US election was another unexpected and (for many) undesired surprise. Setting aside my personal feelings on the bluster of this American event and the nature of its candidates, our focus now is on the impact for investments and lifetime wealth. What are the broad brush strokes we can see going forward with a Trump presidency? Ten themes I can share with you today include the following:
1st, it’s interesting to note that 88% of U.S. elections are followed with higher markets over the following year.
2nd, emotions are a total mis-fit with investments. We’ve seen day-after election fears generally give way to rising account values over the following 90 and 365 days.
3rd, a president has limited capacity to exercise personal agenda items needing approval of the House and the Senate. Trump gained fewer votes than Clinton, and Trump is the one who must wrestle with an even-stronger Republican administration, much of which festers over Trump’s recent antics. If the president-elect can follow in the spirit of his acceptance speech and build bridges with House and Senate leaders, also mend angry divisions among people and communities, we may see considerable good arise from this presidency.
4th, Republicans are traditionally seen as pro-growth and pro-business. Even Trump’s issues against Mexico and China could prove positive for Canada.
5th, we should realize we are experiencing a massive shift by which the “silent majority” are unwilling to accept the status quo. Undoubtedly we will hear more on this in the seasons ahead. We’ve seen a major shift in Canada, UK, US, with more of the same likely in upcoming elections in Europe. Not all will be positive, but people are restless and change is coming.
6th, seen in the great flow of history much will be galling or good but financial results will generally rise over time. We maintain our vital focus to reduce risks while sustaining income and growth to match your life-needs and lifestyle goals.
7th we may be entering a period that is less green-friendly …not speaking of little green people but of the ecological movement to reduce fossil fuels by increasing renewables and low-energy consumption. Trump favours coal, oil and pipelines, possibly delaying the progress toward a greener and healthier planet.
8th, the combination of intended tax-cuts ($6Trillion over the next decade) and expanded infrastructure offers a tremendous boost to the US economy and even among trading partners, certainly including Canada. Higher inflation can also ease pressures of U.S. public debt which would be crushing in a deflationary world.
9th, trade agreements will face amendments but this was true with both presidential candidates. The process to amend and realign such agreements is vast and complicated, suggesting it could take considerable time to complete. Trade is vital to the U.S. as it is to us all; the House and Senate will represent their peoples’ concern of Mexican and Chinese manufacturing, but even today US labour market is near full capacity. Immigration and trade are not going to change overnight and the process should let investment markets continue with typical bumps along the way.
Tenth, no event better highlights the sustaining value our “Life Income Mandates” in preserving wealth and sustaining Income for Life. You have personal goals, and while our client-family represents every age and stage of life, the fact remains you know what you want your money to do for you. This entirely fits within our process, as we certify the planning by which you can reach your goals with comfort and confidence.
We are not taking big risks. Even this year’s bumps and bomb shells have limited effect. In the days that follow we see accounts rising. Actually we remain highly confident as Global and Canadian Dividends, Real Estate, Infrastructure, and cautious positions in fixed-income, will continue lifting values and abundantly sustaining your goals and needs.
Reach me with any specific questions or just to say ‘hi’. I love hearing from you, and certainly want to chat together soon as we turn the closing pages of 2016 and ensure we are in good shape for an opening 2017.
Yours in Financial Security for LIFE!
Brian Weatherdon, Certified Coaching in Wealth and Retirement.
905-637-3500 x 223. 1-877-937-3500 x 223. Brian@SovereignWealth.ca
Brian's books available locally and also from Amazon:
- A Lifetime of Wealth - And How Not To Lose It. (2013)
- Protecting Life, Loved Ones, and Future Dreams. (2013)
- Your Business, Your Retirement -- Halton Retirement Study. (2015)
** This monthly letter touches on key strategies in Canadian and global investing and financial planning. This letter is not an offer to sell any kind of security, insurance, or program. Historical returns and risk measures are not a valid guide to future performance. Returns are from publicly available sources and research from a variety of firms including but not limited to GLC, RBC, CIBC, Mackenzie, Franklin Templeton. Opinions reflected in this letter belong solely to the author and no other body is responsible for the content expressed here. We value opportunity to consult alongside your legal and accounting firms to advance your financial security and unique goals. We are grateful always to receive your comments and questions.