Why uncertainty over the US election is a nightmare for investors
Uncertainty over the US election has put portfolio risk front of mind, as investors seek to both protect themselves from volatility and ensure they are well places to take advantage of the successful candidate’s policies, says Colin Clunie
This year’s US Presidential Election, set to take place on 5 November, is predicted to be one of the tightest in history, with the incredibly close polling figures reminiscent of the previous two election cycles. While they are currently indicating a slight lead for Donald Trump in several key swing states, the race remains highly competitive. For investors craving certainty, this is a nightmare. The situation puts portfolio risk front of mind, as they seek to ensure that they are protected from potential volatility due to the result, while equally being able to take advantage of the markets depending on the successful candidate’s policies.
The very different approaches that each candidate is expected to take from a fiscal perspective are referred to in recent analysis from the Committee for a Responsible Federal Budget, a non-partisan group in Washington. This report suggests that if successful, Trump would raise US debt by twice as much as his opponent, Kamala Harris. Equally, they take very different views on areas such as green investing, where Trump is an established sceptic.