Trump Win Market Slump Over in a Blink

THE WEEK: Morningstar columnist Rodney Hobson predicted that the market slump post Trump election would be brief - but not quite as quick as it turned out to be

Rodney Hobson 11 November, 2016 | 12:01PM
Facebook Twitter LinkedIn

I suggested in my last column before the US election that any immediate stock market reaction to the result, whichever way it went, would be short-lived, just as the impact of the Brexit vote was. However, I could not have envisaged just how short the blink of an eye could be. The FTSE 100 index dropped 100 points as Donald Trump’s victory was confirmed just before the London opening. Within one hour that loss had been wiped out.

The lesson for small investors is not to get sucked into a panic in the first few minutes of trading. Leave that to the day traders, who thrive on this sort of reaction.

For the longer term, the election at least frees the deadlock caused by having a Democrat president and a Republican Congress. Although President Trump will probably be a lot less wild than Candidate Trump, I am sure there will be some tax cuts and some extra government spending, with the bill to be picked up later. That will help to get the economy moving despite a quarter point rise in interest rates next month.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.

© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies       Modern Slavery Statement