Donald Trump’s election to the highest office in town knocked a lot of us off our pins. Potentially worse, though, is what’s still to come. A simmering broth of fear bubbles beneath people’s anticipation of the future, particularly as it relates to their personal fortunes.
Precisely what a Trump presidency spells for the markets and Canadians’ investments therein remains very much to be seen, but speculation on the stuff abounds. To follow, a digest on some of the more salient predictions on what this development might mean for your money.
The dollar is going to continue to suffer. From the moment the election results started tumbling in, the loonie started tumbling down. Broadly speaking, those with an eye on the scene expect ongoing pressure on Canadian coin.
As already demonstrated, the stock market will be volatile. The Dow Jones industrial average has already been on a bounce cycle since the ballots were counted (the markets sank post election, but rallied in response to the unexpectedly diplomatic tones of the president-elect’s acceptance speech). This trend will almost certainly continue, say the experts. The takeaway: Never get too complacent with an up or too despondent with a down.
Trade activity could fall either way. While Trump’s not held back on his distaste for NAFTA, his negative vibes have unquestionably been focused on Mexico more than Canada. If he slams down hard on his neighbour to the south, some analysts can imagine a bilateral Canada-US trade agreement coming into play, and a net gain for the States’ northerly neighbour.
Interest rates will likely continue as they have. The American Federal Reserve will probably delay enacting any changes to its rates to wait out the deets of the economic policies of the incoming prez. And Canada’s bonds and mortgage rates will probably follow suit.
Matthew Barasch, Canadian equity strategist at RBC Capital Markets, told the Globe that Trump’s plan to lower taxes could increase infrastructure spending, and promote oil production—both of which should shine positive rays on Canadian stocks.
Perhaps the election of a xenophobic and misogynist president will make Canada the beneficiary of talented, ambitious immigrants fleeing the oppression of their homeland. And the more clever folks we have working on our team, well, the better off we’ll surely all be.
At the end of the day, economic analysts are no more credible than pollsters. Predicting which economies, stocks, sectors and currencies will plummet and which will prosper is a mug’s game. Not enough the brightest-light pundits know how a Trump presidency will unfold. Best to take the counsel with the longest track record and just sit tight and have faith.