Nobody knows what will happen in the US election that’s just around the corner. Many people think no one should modify a portfolio in anticipation of an expected outcome. This is common advice now because things are so tight. But what we do know is that both candidates will be protectionist as President, and will likely run high deficits, thereby adding to the accumulated debt which already stands at nearly $36 trillion.
My concern is regarding what might be considered first-derivative considerations. If Trump wins, we will probably see new tariffs and a vendetta-like campaign against his enemies. If Harris wins, it’s all but certain that Trump will insist the election was stolen, especially since he is due for sentencing later in November for 34 felonies he has been convicted of.
Also, with a Trump win it is reasonable to expect chaotic policies that involve inflationary tariffs, mass deportations, and maybe the undermining of constitutional law. If Harris wins, expect a chaotic response from the defeated candidate in a desperate attempt to avoid going to jail. As such, it is difficult to imagine any outcome where pandemonium does not ensue. The only remaining questions involve the form of pandemonium, gravity of the consequences, and reasons for it happening.
Markets have been remarkably benign for the past two years or so with inflation slowly dissipating, profits remaining robust, and investors being remarkably optimistic. As we enter the last week of October 2024, markets are priced to perfection and it looks like there is far more downside than upside. At STANDUP advisors with Designed Securities Ltd., we’ve been rebalancing portfolios to make them more resilient and defensive because no matter who wins, we will have challenges unlike anything experienced in the recent past.