by Simon Lewis


Expect the unexpected


When the Wall Street Journal writes that, for economists, the uncertainty surrounding a Trump presidency ‘is absolutely enormous’, then you need to sit up and listen. Shockwaves reverberated around the world as Clinton slammed onto the canvas while Trump did his victory dance on the day that changed the world: the day Trump surprised everyone to become president of the USA… and the most powerful man in the world.

Who would have thought?

In the financial planning industry, every day presents the challenge of looking into the future to plan, predict and make contingencies. Even to profit on the losses of others. After all, for one to profit, another must lose.

The media widely predicted that the bottom would drop out of the economy if Trump snatched away the keys to the White House. Yes, the first days were a rollercoaster ride, but the US of A’s economy did not explode (or implode). Trump’s Twitter account has, however, been working overtime to create countless other diversions and distractions (from crowd sizes to illegal wire-tapping), but financially there are no disasters on the horizon.

As a financial planner, you must take great caution with everything you read or hear, either in the media, around the coffee table or over a glowing braai. After all, people love to give you the side of the story that fits in with their agenda. Just like the media (and Hillary Clinton herself), you also need to be wary of taking anything (or anyone!) for granted. We are in the age of change, disruption and the rise of populism. Everything is digital but, even so, many brick and mortar businesses are now blossoming more than ever.

Two weeks after Trump became President Elect, Reuters reported that the dollar had hit a 14-year high “against a basket of currencies as a post-US election sell-off resumed across global bond markets, lifting Treasury yields and attracting investors to the U.S. currency”.

Of course, there is much to read into this and much to follow that could reverse that picture, but one can anticipate a boom in economic activity as Trump swipes the US credit card to build that wall and live up to his other numerous promises, in particular the repeal and replacement of the “disasterous” Obamacare. They say inflation will rise with the dumping of Mexicans “back where they belong”, and it’s expected that US interest rates will rise faster than previously anticipated which, in turn, should further boost the dollar.

I must admit, for the media these are fun and exciting times we are living in. Soundbites have never been so bountiful. However, for anyone looking after the financial futures of their clients, it will be a white-knuckle ride at times, with fortunes to be made or last. Monty Python’s immortal words no longer apply: “Nobody expects the Spanish Inquisition.”

After Trump took the White House, you should expect just about anything!

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This edition

Issue 72