The ‘Trump Effect’ and how he is implementing the Make America Great Again (MAGA) agenda.
Markets and politicians around the world are currently digesting Trump’s ‘Liberation Day’ tariff announcements and you may be thinking “is this a run for the hills moment?”
As we regularly espouse, volatility and temporary declines are inherent aspects of investing in global markets like equities (shares). These fluctuations can be viewed as the ‘cost’ of aiming for the higher expected returns that equities have historically provided over the long run, compared to more stable but typically lower-performing assets such as cash deposits.
While some entities will seek to actively trade and time these new market dynamics, we believe the sheer unpredictability of Trump and the speed at which he can launch new policies, before turning on a dime and announce its retraction, indicates just how challenging it is to successfully actively trade this market.
We wish our active peers the best of luck, while noting the evidence is firmly in our favour for approaching markets using a buy-and-hold approach. The focus being on setting strategic asset allocations and maintaining these over the long-run, rather than a short-term tactical approach seeking to outperform markets over the short-run.
Thank you to Jonathan Simpson, MSci, Investment Support Analyst at ebi for the following insights into the Trump Effect:
- Reversal of Support for Ukraine
- Onshoring and Prioritisation of Artificial Intelligence
- Imposition of Tariffs
- Impact on Global Markets
- What action (if any) should you take?
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