US  

What to sell, buy or hold now Trump is in charge

Ben Willis, head of research at Whitechurch, said he planned to maintain a core exposure to US equities with a focus on dividend producing stocks and sector funds focused on infrastructure and financial companies. 

Mr Willis said: “We remain underweight due to valuations looking relatively expensive. However when the dust settles we may look too add some US equities where we see areas of the market that could benefit from a political change.

“However, for most investors these should just be a component of well-diversified portfolios, both internationally and by asset class, which will help mitigate the effect of the uncertainty.”

As with Brexit, Mr Willis said it was vital to understand that political shocks are a concerning time for investors but push that the focus should remain on a long term investment horizon and not let fear in the short term dictate strategy. 

Mr Willis said: “We believe that investors are often too fixated on the short-term and when short-term sentiment is driving markets this can lead to depressed valuations that provide good potential for recovery.

“Our focus will remain on providing well diversified portfolios that are focused towards providing attractive risk adjusted returns on a long-term view.”

Stefan Kreuzkamp, chief investment officer at Deutsche Asset Management, agreed it was vital to encourage investors to hold their nerve.

Mr Kreuzkamp said: “Historically, markets have tended to applaud Republican success at the ballot box. With Republicans in control, you would usually expect a lighter touch on regulation, swift progress on corporate tax reform and across-the-board tax cuts. 

“On all these issues, Mr Trump’s stated positions line up with those of Republican leadership in Congress. 

“The end result may well be prioritizing a more-or-less conventional Republican agenda over economically detrimental campaign promises in areas such as trade and immigration. 

“Do not underestimate his (Mr Trump’s) capacity of turning his latest endeavour into a success. His uneven performance on the campaign trail suggests that today’s market reaction may not be the last time that politics causes jitters on Wall Street. 

“In weeks to come, they may also create solid buying opportunities for disciplined investors willing to look beyond the immediate risks.”

emma.hughes@ft.com