Damian Barry, senior investment manager at Seven Investment Management, also called for calm heads, having around 14% cash in his balanced models.
“We are staying put for the time being as we think there could be a bit of back and forth in the next few days,” he says.
“There is still huge uncertainty. Trump doesn’t get inaugurated until 20 January and in the meantime he must build himself and administration, which means hiring a lot of people for important roles. It is also worth remembering that he is due in court in San Diego on 28 November on the Trump University case.”
Looking at the wider picture is Royal London’s head of fixed income Jonathan Platt, who believes the main implications of the election are likely to be higher inflation as a result of fiscal policies, such as tax cuts and infrastructure spending.
“In the medium term this will raise US and global interest rates, but there may be a short-term hit to consumer and business confidence. However, a comparison with Brexit would suggest that this could be overstated.
“The Republican’s potential dominance of executive, legislative and judicial branches of US government suggests that there could be meaningful changes to social, economic and foreign policies, although given the animosity felt towards Trump from within his own party, this is no certainty.
“Trade policy remains the biggest unknown, but Trump’s initial acceptance speech was conciliatory on relations with other countries.”
Royal London is maintaining short duration positions, as well as overweight allocations to, and positions within, credit markets and a preference for inflation protected securities as it continues to see expectations of inflation rising.
