Global markets have already started pricing in a Clinton victory, but should the result not be as they expect, there will be a “double whammy negative impact,” warns the boss of one of the world’s largest independent financial advisory organizations.
The warning from Nigel Green, founder and CEO of deVere Group, comes as America heads to the polls today in one of the most divisive U.S. presidential elections in history.
Mr Green comments: “The markets have already started pricing in a Clinton victory. Should she win, global financial markets will react favourably as she is seen to represent the status quo, whereas Trump is much more of an unknown and therefore will create uncertainty and the markets will react accordingly.
“However, 2016 has been a year full of surprises. Don’t forget the markets priced in a ‘Remain’ win in the Brexit referendum and got it wrong; indeed the pound was being traded at 1.5 against the U.S. dollar on the day of the vote.”
He continues: “Therefore, complacency and full assumptions must be avoided. This is particularly important because if Trump prevails, we can expect, in the immediate aftermath, a double whammy negative impact on the markets.
“This is because the likely sell-offs will be compounded by the markets having priced in a Clinton victory and were wrong. Plus the markets tend to have knee-jerk reactions to these kind of events.”
Mr Green concludes: “Whether Clinton or Trump wins the keys to the White House, there will be risks to avoid and major financial opportunities from which to take advantage. But for now, only the brave would take major positions each way.”