President-proof client portfolios warns de Vere CEO
13 August 2020
Investors should review their portfolios sooner rather than later, as the countdown to the Presidential election is likely to have big repercussions for investments, deVere Group founder Nigel Green has warned.
Green explains: “Understandably, news agendas and conversations across the globe have been dominated by the impact of the pandemic for the last five months. As such, it has been all too easy to forget that for investors the defining issue of the year was always meant to be the forthcoming presidential elections in the world’s largest economy.”
Whether Trump or Biden win, Green says investors can expect some major policy shifts which could affect investments, taxation, regulatory landscapes, and corporate earnings for the next four years.
Green says: “There’s increasing talk of Joe Biden securing a Democratic sweep of the House, Senate and presidency. Should this happen it would likely hit risk assets, including equities.
“It also potentially could mean tax hikes for corporations and higher earners, the possible introduction of wealth tax, the break up of Big Tech companies, environmental reforms, increasing regulation and more healthcare spending.”
If Trump were to win, his policy could see include tax cuts, increasing infrastructure spending and deregulation, which would be positive for stocks and other risk assets.
Green says: “As always in a presidential election, there will be investment winners and losers. This time they could be even more pronounced due to the two candidates offering very different administrations. However, the priorities of whoever is in the White House can also change quickly to respond to unforeseen events.
“Therefore, I would suggest that investors review their portfolios to ensure that they are as ‘President-proof’ as possible so that they can take advantage of the opportunities and mitigate the risks regardless of who is the next President of the United States. This means proper diversification across asset classes, sectors, geography and currencies.”
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