13 Nov November 2016: Post-Election Special Commentary
Last evening our nation cast their votes to elect the 45th President of the United States. We can all now breathe a sigh of relief that this long election cycle is behind us. In our October 5th commentary titled “The Election”, we touched on the initial knee-jerk reaction that often accompanies presidential elections: “…nearly half of the electorate will be disappointed with the result and predict ensuing catastrophe in the financial markets.” This morning, we are experiencing just that, as the markets digest the last evening’s outcome punctuated by results that were not as the polls had suggested. Markets dislike uncertainty.
We expect volatility to persist in the coming weeks while the new administration provides more certainty around its agenda. Still, we believe client portfolios will thrive long-term and weather any short term volatility well.
The companies we collectively own are global in nature. They possess definable competitive advantages, operate in industries with barriers to entry, and were purchased at fair to undervalued prices. With each investment, we have explicitly considered the downside and believe many of our holdings’ defensive nature provide better outcomes in the midst of uncertainty, especially when compared to the general market. We are always prepared for outlier outcomes by virtue of the investment strategy we employ.
The markets knew Clinton, but Trump is new. In pre-market trading initial signs pointed to a lower Wednesday market open. However, throughout last evening as the news permeated the global markets and time passed, a calming effect took hold. We believe this overnight reaction is a microcosm for the next few weeks. As we learn more about the future direction of our country we know this: we are fortunate to live in the United States, a country with bright minds, smart innovation, established rule of law, top universities, and great companies. These tenets of our democracy are ever-present.
Our job as your investment adviser is to provide our best for you and to be there when you have questions – to make certain you are comfortable with our approach. To that end, please call or email us with any concerns or comments you may have. As you know, at Greenwood Gearhart all of our personal investments – and those of much of our families’ – are invested along-side our clients. From Mary Ann to Brock to each Greenwood Gearhart team member, we stand with our clients. Thank you for your trust.Download the PDF