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Mackenzie Minute: November 18, 2016

Alain Bergeron, Head of the Mackenzie Asset Allocation Team, outlines the market’s reaction to the U.S. election and what to watch for in the first few months of Trump’s presidency.

Show transcript

Well, in the last couple of weeks, we had a major event.  Actually, we had two big events, I would say.

Number 1, is the result of the U.S. elections.  So, Trump getting elected. While the market was going at about a 25% probability, was a big shock.

The second big shock happened a few hours later, on November 9th around 2:00-3:00-4:00 a.m.  And, it's that the markets started to do a big turn and how they interpreted what actually it meant economically-speaking to have Trump as a president. And, really that came from the perception and the realization that a Trump president may  be quite different than Trump the candidate.

Over the next couple of weeks, what we're watching is more information or trying to reduce the uncertainty around the policy that we may see from Trump.  But, really as much as for the next two weeks, that's for the next several months.  There are three things, I think, people should watch related to that.

Number 1, is the personal choices.  Who Trump will add to his administration. 

Number 2, it's the policies that he will push forward.

Number 3, is what will be the reaction of congress or internally to the U.S., his policies which will be supported, which will be fought, as well as what would be the reaction to foreign entities, foreign governments, to the policy that he's pushing for.

One thing that's good about these shocks is that it's a good test for portfolios, especially for when you have multi-asset portfolios, that have multiple managers, risk, concentration can hide. And, I am very pleased with the result of symmetry portfolios during that period where the risk profile and behaviour has been very consistent with our expectations.

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