United States of Anxiety – what does this mean for us?

Once again defying the polls, Donald Trump unquestionably did better than predicted, but it looks like Biden may have controversially pipped him at the post.

It seems that this is the second consecutive Presidential election that the winner has not obtained the most votes and the third time this has happened in the last six elections. (Before then, it hadn’t happened since 1888).

So, what does this all mean for us in the UK and for investors in general?

Well, concerning the UK, we clearly remain in limbo until we understand exactly who we will be talking to, going forward. Boris Johnson has intimated many times that there is a US/UK trade deal on the table at present. Whether this remains so if Biden wins is another matter, but at present, no more can be done with that until the Presidential result is confirmed. Therefore, will this delay affect our negotiating position with the European Union as we head to deadline day at the end of the year? This depends on how long the delay is, of course, but all we can do is wait and see.

Biden is not a great friend of the UK, due to his Irish heritage and the potential Brexit implications for Ireland. Biden has already implied that there would be no trade deal if there is a hard Irish border. He also favours European unity. Does this naturally point to a Donald Trump win being better for the UK? Frankly, I don’t know.

However, that is the important point. Stock markets will simply do what stock markets do, irrespective of US Presidents. The likes of Mr Trump may generate short term movement with comments about this or that, but ultimately, history has shown two things.

Firstly, the performance of global stock markets is affected much more by matters outside the White House than inside. Whilst the general feeling is that a Republican President will offer a better return, the performance of the US stock market was better under Barack Obama’s first term than it has been under Donald Trump’s. However, that is surely much more to do with circumstances and timelines than anything else.

Secondly, and more importantly, irrespective of who lives in the White House, my view is that the most suitable circumstances for any form of long-term investment is a multi asset, risk rated portfolio. Our mantra continues to be ‘time in the market’, NOT ‘timing the market’.

Naturally, as a firm, we will continue to have conversations with our Investment partners concerning the implications of both the result and any delay in this result, but we remain committed to long term multi asset risk rated portfolios.

As a nation, we are having to manage the implications of a worldwide pandemic at present, so surely the small matter of another bizarre US Presidential election over the pond is the least of our problems.

In the meantime, if you have any questions concerning this or any other matter, please do not hesitate to contact us.

The value of your investment (and any income from them) can go down as well as up and you may not get back the full amount you invested. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.