Markets are settling after this historic result. Stock markets are down but not as much as the futures markets had been overnight. With Republicans now in control of both houses that particular uncertainty has passed, but this does not mean that there are no moderating forces on some of his more eye-catching policies.
What is clear is that he inherits a strong US economy and his instincts are for tax cuts, de-regulation and looser fiscal policy the outcome of which is likely to be the normalisation of interest rates, economic growth and inflation. While nothing has fundamentally changed overnight we see the sentiment which has been moving against bonds and fixed interest becoming even stronger. In general markets are calmer than after Brexit and the multi asset funds which form the majority of our client portfolios, whilst not positioned in particular for a Trump victory, have been adjusting the nature and scale of their bond exposure for some time.
We have been adjusting portfolios in recent months and the direction of these changes is not affected by a Trump election. Our theme continues to be increase diversification and use funds with a flexible remit.
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