There were two horrible candidates running for President and unfortunately one had to win.  As a result, we are now stuck with the one with the most extreme ideas out of any recent President.  From breaking trade agreements to radical ideas such as building a wall to keep illegal immigrants out, it will be interesting to see the outcome of Trump as President. 

During the race to the White House neither of the candidates mentioned what needs to be done to fix the many problems the country faces.  Instead, both Donald and Hillary would name call and throw fits better than most guests on the Jerry Springer show.  No matter who won, America cannot move forward without fixing the many issues that the country has been facing for decades.  Medicare, budget  and trade deficits, addiction to military, crime, poverty and national debt are just a few issues that need to be addressed. 

It is far too early to make predictions on the outcome of Donald Trump’s presidency.  What we do know is that Trump is going to hurt Canada if he tears up all the trade agreements both Canada and the US worked hard to create.  Plus, he does not believe in climate change and is 100% against carbon taxes.  This alone makes almost all Canadian industries non-competitive with our largest competitor.  One possible benefit we will realize under Trump is we may become the gateway to North America for foreign capital.  Capital hates risk and will avoid the States if Trump carries out his campaign promises and will flow into Canada instead.  

Stock markets in the States are in record expensive territory based on profits, which have been declining for six quarters.  Earnings are now below what they were two years ago.  There is no way corporate earnings will grow if Trump carries out his campaign promises. If anything, it is going to scare capital away. Even huge tax cuts will not justify today’s valuations.  

The truth is America is broke and needs almost $2.5 trillion every year just to pay interest on the debt of $19.2t.  Wages are not growing, nor will they under a Republican government.  Under Trump, look for unemployment to move higher, especially if he does away with trade deals.  Interest rates, while up .2of 1% since the election indicates interest rates are heading higher in the year to come.  

For months we have stressed keeping the majority of one’s investment monies within Canada.  We maintain this stand.  Stock markets are going to be extremely volatile until profits improve and Trump has been in power for a while, allowing the world to properly assess his governing.  The markets are overvalued and require a 10-15% decline to bring them in line with their historic averages.  Continue to favour cash and collect those dividends.