If you feel you have entered the twilight zone when  you woke up on Wednesday this week, you are not alone. In the mid-1600s, a physicist named Blaise Pascal coined the term – Pascal’s Wager, a game theory concept, in which he proposed that given the choice between believing in God and not, believing is always a better option. While we won’t get into the details of the theory in this report, the election of Trump as the next President forces us to unquestionably accept Pascal’s view. It didn’t help that  the major polls have now incorrectly called the two most important elections in the world in 2016.

What do we believe a Trump presidency means for the markets? In the near term, volatility could be expected to surge as the markets will attempt to digest every key decision coming from the new President’s transition team. Trump’s economic plan is expected to be pro-growth focusing primarily on tax policy, trade  and deregulation. This could favor biotechnolgy, pharmaceuticals, infrastructure, industrial and financials sectors. But, technology, solar and healthcare companies could feel the pressure under the Trump administration with emerging markets and international exposure becoming more risky.

Future Wealth View

In last weeks report, we had suggested that changing investing strategy on a presidential election result would not be a wise choice. In the near term, we still believe this to be the case. That said, it is clear that old order of investing on fundamentals, earnings growth, technological advances could be replaced by sharp market movements based on unexpected and polarizing comments from the new administration. Diversification and safe havens are going to be harder to find. Which means investing for the future will have to be done more deliberately and cautiously. At Future Wealth, once the dust settles and the new administration moves into the White House, we expect to make a few key modifications to our client positions to adapt to the new world order – Make America  Sane Again.