This is a question that we are hearing from all directions these days – ever since the unexpected Presidential election results last week. It seems that every financial columnist or opinion writer has a pet issue or question and a favored response. Not to be left behind, we chime in here with the opinion that the right answer is that not much is actually going to happen in the near term.
I will qualify that by stating that not much with long term impact is going to happen because the President-elect cannot actually do anything until the inauguration is completed and the incumbent departs. There is likely to be much guessing and hoping or fearing and with that a great deal of movement in the markets as one idea gains favor and another becomes passe.
During this waiting period, the current administration and assorted lame ducks may or may not offer some legislation or extra-legislative guidance in the form of additional executive orders. Anything that happens in this fashion, however, is subject to being overturned fairly easily when the new President takes office if, of course, the new President cares to overturn whatever it is. So that avenue seems closed to any major long-lasting impacts.
This is not to say that any news item, however miniscule in size and/or importance, will not get much attention and “analysis”. It will. After all, those who make their living predicting how (and why) the markets will move can’t afford to ignore any item and must maintain an online presence. But it is important to remember that they are not really doing this to serve you but, rather, to get your attention and your “likes”.
My counsel is to be patient and to wait and see what actually happens. There are many possibilities and each of them may become a high priority, change to something unrecognizable or be ignored. That is why it is important not to pin all of your hopes on buying or selling a particular security today based on what you or someone else feels the government will do – it might misfire and hurt rather than help you.