Capital Markets when caught by surprise frequently drop. Look no further than Brexit (British exit from the EU) for recent proof.
Due to the fact the election results were different from what capital markets had expected we would expect pressure initially.
Markets Driven By One Thing
The ultimate driver of capital markets are EARNINGS. Yes there are headwinds (rates) and tail winds (macro economic growth) that detract or add to this, but in the end, it’s earnings. There will also be certain sectors that may have different appeal due to the election results, but in the end, the ultimate importance are earnings.
After the dust settles, earnings will regain focus.
Another reason Diversified Portfolios are our Mantra!
Have a Great Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth