Q. What areas of the stock market should be unaffected by the election?
— Investor

A. That’s certainly a timely question.

After the election, America woke up to a new president with new strategies and ideologies.

Despite projections that called for a large market selloff in the event of a Donald Trump victory, broad U.S. capital markets ended the day on the positive side, said Taylor Thomas, a certified financial planner with Round Table Wealth Management in Westfield.

He said a closer look within asset classes reveals industry sector performances directly influenced by Trump’s stated policy agenda.

“While some industry sectors such as renewable energy have sold-off, other sectors such as industrials and pharmaceuticals have experienced meaningful appreciation,” Thomas said. “Globally, emerging markets and certain currencies have sold off on concerns of future trade policy.”

Investors should continue to analyze the impact of Trump’s policies and how they may impact the markets and their own portfolio on an ongoing basis, Thomas said.

“One may want to consider tactical shifts within asset classes to capitalize on sectors and asset classes favored by the new president,” he said. “Rebuilding America was a theme within Trump’s campaign and could provide for additional upside to the U.S. industrial sector depending on the actions taken.”

And, Thomas said, if Obamacare is altered or removed, we could continue to see strength out of the health care sector.

And finally, if Trump is able to increase economic growth and consumer spending during his presidency, a rising tide could lift all ships, Thomas said.

“If an investor is looking for a safe-haven asset class, he or she should look to short term, high-quality corporate or government, municipal bonds or cash,” Thomas said.

He considers the equity markets — both U.S. and international — to be fairly to slight overvalued, so he’s concerned about the outlook for corporate earnings over the next 12 months.

“That said, if an investor is managing his or her funds for the long-term — over ten years — an allocation to stocks makes sense,” he said.

For more on post-election market analysis, read our special election report.

Email your questions to ask@njmoneyhelp.com.

Karin Price Mueller writes the Bamboozled column for The Star-Ledger and she’s the founder of NJMoneyHelp.com. Click here to sign up for the NJMoneyHelp.com weekly e-newsletter. Like NJMoneyHelp.com on Facebook and follow it on Twitter


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