Guidance

RESOURCES TO HELP SHAPE YOUR FINANCIAL FUTURE

History was made in the wee hours yesterday morning when Hillary Clinton conceded the 2016 presidential election to republican Donald Trump. Global financial markets cratered, with many markets off 3-5% and Dow futures down more than 800 points, as the inevitability of a Trump victory became apparent earlier in the evening.

For the second time in five months, the forecasts of pollsters, pundits, and short-term traders missed the mark on a major, global political event. We will leave much of the interpretation of these events to others; what we will say is that, in two of the world's largest and most progressive societies, the "working class" population has made its voice heard loud and crystal clear. The majority of these folks have not seen their household incomes rise in more than 10 years, and they want change. As Brexit will bring about changes in the U.K. in the next 20 years, so undoubtedly will a Trump presidency.

 

But what will the impact on markets be? From an economic standpoint, many of those that predicted a resounding Clinton victory will now tell us to expect tax cuts, growing U.S. budget deficits, renegotiated trade deals and pro-business policies. We will undoubtedly hear smart people in one camp talking about economic calamity, while other equally smart people will suggest that renewed prosperity is on hand.

 

For our part, we will take a deep breath and pause. Short-termism can be dangerous to one's investment portfolio. There will be changes for sure, but we expect to have plenty of time to evaluate them and their long-term impact on financial markets. The intrinsic value of a business does not change every moment that the market is open, despite the wild swings that may occur in that business's share price. Though Brexit wiped out more than $3 trillion of equity value in two short days, investors bid shares back up within a month to new all time highs. We expect our patient, focused effort to invest in high-quality companies that are well managed and well capitalized to serve us well over time, and that should reward the investor looking for value creation over the longer term.

 

 

Manager commentary provided by Great Lakes Advisors, a Wintrust Wealth Management Company. Market commentary represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice.