Different issues have a different level of importance to different people in the presidential candidacy race. You may be voting based on foreign policy experience, gun control stance, immigration, etc.
But one thing every investor should care about is the potential impact each candidate could have on the stock market.
So whether or not your mind is already made up, it’s never too early to look at what your vote could mean for the money you’re investing…
To keep things digestible at this early stage of the intraparty presidential candidate races, let’s focus on the two frontrunners for now – Donald Trump and Hillary Clinton. If and when it becomes apparent that we need to delve into other candidates, we will do so at that time.
And please note that this is in no way an endorsement. My intention is only to lay out the facts and shed some light on the potential impact each candidate could have on the stock market for the years to come.
So let’s start with Trump…
The short story with this candidate is that he’d likely bring unpredictability to the table. So while his plans for tax cuts could be beneficial for the market up front, things like his plan for big tariffs on China may have the potential to spark a trade war, which could be crippling for the market.
Then the questions will turn to whether or not Trump will be able to make the “deals” he’s been campaigning about. As a businessman, he’s proven he’s more than capable of doing so, but will that carry over?
And a big hole being pointed out about much of Trump’s plans after taking office is the lack of specificity in how he’d pay for his many potential moves. So there’s certainly a possibility of short-term success followed by a deeper hole for investors to dig themselves out of later on.
So in essence, the question about Trump’s impact as far as investors are concerned should be whether his pro-business agenda will have the momentum to push the economy into a state able to handle the long-term issues, and how his agenda will be paid for…
And now for Clinton…
For many, Clinton is proving to be “the devil you know” option in contrast to Trump being “the devil you don’t know.”
A good possibility for a Clinton presidency is a much more predictable impact on the stock market. And one thing we’ve learned about the markets is that they generally perform better with easily processed policies.
And how you view her tax plans will depend on your situation. Much of her tax-raising is aimed at the wealthy, leaving most Americans untouched.
But then there’s the question of Clinton’s allegiances after taking big money as campaign contributions from special interest groups. And that’s a stark contrast to Trump’s largely self-funded campaign.
So the question about Clinton’s impact on the markets as far as investors are concerned is, will Clinton’s easily processed policies and largely hands-off approach to the market benefit us, and will she remain objective after taking special interest group money?
