What Trump's victory means for the retail investor

Most experts betting on US stocks in tech, utilities, defence, financial, energy sectors

- Colin Tan

The US election result will have an impact on global trade and finance in the coming months and years.

A key determinant of how Trump 2.0 will affect various asset classes is how quickly and aggressively the newly elected president will implement his policies.

Endowus chief advisory officer Hugh Chung noted: "A second Trump presidency may lead to higher inflation, interest rates and a stronger US dollar due to higher tariffs. It may also mean stronger corporate earnings due to tax cuts."

While stocks and cryptocurrencies have risen in anticipation of these policies, the initial rush seems to have given way to some introspection, given concerns that US President-elect Donald Trump may not be able to follow through on his campaign promises.

However, these trades may regain momentum, especially if the Republican Party controls both the US House of Representatives and the Senate, making it easy for Trump's policies to pass.

Here is what the experts recommend.

EQUITIES

"Investors should brace themselves for further swings ahead. We advise investors to be ready to take advantage of any outsized market reactions," said Ms Tan Min Lan, Asia-Pacific head of UBS Global Wealth Management's Chief Investment Office.

Invesco global market strategist David Chao said: "US assets tend to do well in the year after an election, especially stocks."

Insead associate professor of finance Ben Charoenwong said: "Tough trade policies with China actually tend to increase diversification benefits, so Singapore-based investors may want to consider owning broader Asian stocks that may benefit from the supply-chain decouplings.

"Given Trump's uncertain and aggressive stance, defence stocks may provide a hedge to rising tensions. There are also plenty of thematic bets that can be made, such as short importers and long domestic producers."