How Trump’s Win Could Impact Your Finances and Investments

Trump’s last presidency highlighted the potential benefits and challenges of his approach to deregulation and economic policy. While sectors like finance and energy saw gains, market volatility was notably high, with significant ups and downs tied to global trade dynamics and domestic policy shifts. For investors, the lesson learned is the importance of maintaining a steady, diversified approach in the face of potential policy-induced market swings. 

The Trump administration has historically emphasised tax cuts, particularly benefiting corporations and high-income individuals, with potential cuts in federal tax rates. If further reductions are introduced, it could boost take-home income for some but might also lead to changes in tax reporting rules, particularly for those with foreign income or investments. 

It is important to keep an eye on any tax reforms that could alter income reporting, deductions, or credits, especially if you have cross-border financial interests.  

Healthcare policy is another area that could see significant change under Trump’s administration. With his stated intention to reduce federal oversight in healthcare, certain reforms could impact healthcare costs and coverage options, particularly for individuals without employer-sponsored insurance or those with pre-existing conditions. 

For those who travel frequently or split time between countries, any shifts in U.S. healthcare policy may also impact whether maintaining U.S.-based or international insurance is more viable. It could be wise to consider supplemental health coverage options to ensure access to affordable care. 

Trump's economic policies have previously driven fluctuations in currency markets, which could once again influence global exchange rates. This volatility could affect income converted across currencies or the value of assets denominated in dollars. For instance, a stronger dollar might reduce the purchasing power of foreign-sourced income, while a weaker dollar could provide a lift for those with U.S. dollar investments. 

Trump’s policies favouring deregulation may also impact sectors like energy and finance, potentially boosting investments in these industries. However, deregulation can lead to increased market volatility, so investors may benefit from diversifying portfolios and considering inflation-resistant assets, such as real estate or precious metals, to manage potential risks. 

Given Trump’s focus on deregulation, some sectors, such as finance and energy, may experience a period of growth. While this could present new opportunities, it also comes with the risk of market volatility. Investors may consider reassessing their portfolios, possibly incorporating lower-risk assets like bonds, to balance against potential economic shifts. 

Historically, Trump’s policies have had immediate effects on U.S. and global markets, often driving fluctuations in key sectors. This time, we might again expect heightened short-term volatility, particularly in sectors like energy, finance, and technology, which often respond directly to regulatory changes and economic policy shifts. 

In the past, markets responded quickly to Trump’s initial presidency with an increase in U.S. equities, driven largely by investor optimism surrounding deregulation and tax cuts. The "Trump Bump" during his first term included a marked rise in U.S. stock prices as deregulation policies favoured specific sectors but also brought a period of intense market volatility. 

For international investors, it will be important to maintain a diversified portfolio to manage any sharp reactions. As with any period of political transition, some sectors could experience early gains, while others may face adjustments. 

Historically, while presidents often make headlines for economic decisions, market performance over the long term tends to follow broader trends that often transcend individual administrations. Studies illustrate that U.S. markets typically show resilience and continue growing over successive presidential terms regardless of party, underscoring the minimal long-term impact of individual presidents on overall market direction. This data shows that a patient, index-based approach often outperforms frequent adjustments based on short-term political developments. 

While short-term responses to Trump’s policies are likely, we remain invested for the long term and will remain vigilant for opportunities. An index-based approach allows investors to benefit from long-term growth patterns rather than reacting to shorter-term market fluctuations. By staying focused on fundamentals and monitoring potential openings, individuals can capitalise on growth, while also managing risks. 

Changes in U.S. immigration policy could have ripple effects on global mobility, potentially impacting workers with U.S. business interests or those considering international employment opportunities. Tightened visa restrictions or additional requirements could influence the cost and stability of global operations for companies, as well as the ease of obtaining work visas for employees. 

Individuals planning to work or study in the U.S. may want to stay updated on these policies, as they could affect future residency or employment options. Employers might also need to adapt their strategies to support global workforce mobility in light of any immigration reforms. 

Trump's "America First" stance on trade and diplomacy may influence international markets, especially with shifts in trade agreements or sanctions affecting industries like technology, energy, and finance. For those invested globally, currency fluctuations, market shifts, or business climate changes could impact investment returns and the value of foreign assets. 

By maintaining diversified holdings across various currencies and markets, investors may reduce exposure to exchange rate risks and market volatility. Consulting with a global financial adviser may also help individuals make informed asset allocation and risk management decisions. 

Trump’s return to the White House could bring opportunities and challenges for individuals worldwide, especially in terms of taxes, healthcare, exchange rates, immigration policies, and global market conditions. By staying informed and consulting with financial professionals, you can proactively adapt your strategy to navigate these changes and capitalise on emerging opportunities. 

For expert advice on preparing your financial strategy, reach out to our cross-border financial advisers to help you prepare and strengthen your financial strategy for the future.