How to Protect Your Money under a Second Trump Administration

Your hard-earned money is constantly threatened by geopolitical occurrences, volatile markets and economic policy. With Trump in his second term, global markets have already been affected by his economic policies, which will ultimately influence your investments.

Current Dangers for Your Money

Trump Administration

There are already indications of the effect that the new Trump administration has on the markets and personal finance as the new president-elect reveals his economic preferences.

Trump is a big supporter of energy and oil and does not seem interested in green energy. He wants to deregulate industries such as energy, finance and healthcare, which could cause these sectors to boom. More regulated industries like the tech and environmental sectors could be put under pressure.

Trump is not afraid of trade wars and tariffs, as is evident in his intention to place 25% tariffs on Mexico and Canada on the 1st Feb.

Nationalism

Trump is still pushing his ‘America First’ slogan. His first term focused on returning manufacturing jobs to the U.S., a key priority again, particularly in high-tech or critical sectors like semiconductors and pharmaceuticals. This could boost U.S. manufacturing and tech companies but may also lead to higher consumer costs due to less global competition.

Nationalism often leads to geopolitical tensions. It embodies fostering unity and pride within a nation with a move to nationally originated manufacturing products and services. This can often lead to tariffs, trade restrictions, and self-reliance, which could disrupt global supply chains, reduce global economic growth and ultimately increase consumer prices.

Market volatility

Escalating trade tensions can create market volatility, particularly in industries dependent on global supply chains. While some sectors (like domestic manufacturing) might benefit from protectionist policies, others, such as technology and agriculture, could face challenges.

How to protect your Investment Portfolio

Now more than ever, protecting your money from global market instability is vital. The last several years have proven that market volatility is here to stay, with pandemics, wars, geopolitical tensions, risky economic agendas and trade wars.

Consult with a Wealth/Financial Adviser

A financial adviser or wealth manager has the experience, knowledge, and expertise to adapt a portfolio according to the markets, investor needs, and risk level.? Each investor’s financial needs are different, and an adviser can tailor-make a financial plan accordingly.

Diversify your Portfolio

Across Asset Classes: Invest in a mix of stocks, bonds, real estate, commodities, and alternative investments.

Geographic Diversification: Spread investments across different regions to mitigate the impact of a single country’s economic downturn.

Industry Diversification: Avoid over-concentration in one sector, as specific industries may react differently to global events.

Consider Defensive Investments

Stable Sectors: Focus on sectors like utilities, healthcare, and consumer staples, which tend to perform well during economic uncertainty.

Look for Quality Investments: Invest in established blue-chip companies with strong balance sheets and proven track records. (ESG Investments) Environmentally and socially responsible companies may offer resilience in volatile times.

Dividend-Paying Stocks: Companies with a history of consistent dividends can provide steady income regardless of market fluctuations.

Treasury Bonds: Government securities are considered safe havens during volatile periods.

Gold and Precious Metals: These often serve as a hedge against inflation and market uncertainty.

Structured investments: A Structured Product is a financial investment where the returns and risk are defined at the outset, providing known outcomes within a fixed maximum term.

Maintain a Long-Term Perspective

Stay Committed to Your Plan: Avoid emotional reactions to short-term volatility and focus on long-term financial goals, especially if the goal of the investment is retirement.

Unit-Cost Averaging (UCA): Invest fixed amounts regularly, reducing the risk of buying at market peaks.

Rebalancing: Periodically adjust your portfolio to maintain your desired asset allocation according to your risk tolerance.

Review your Financial Portfolio

A financial adviser needs to review a portfolio regularly so that any changes can be made to keep your portfolio performing at optimum levels. This includes rebalancing, adjusting risk, and giving investment advice according to the investor’s needs.

Mitigating the effects of global market volatility requires a disciplined approach to investment management. Diversification, hedging, maintaining liquidity, and staying informed are key. Focusing on long-term goals and maintaining a balanced portfolio can protect your investments while taking advantage of potential opportunities in a volatile market.

Please note, the above is for educational purposes only and does not constitute advice. You should always contact your deVere advisor for a personal consultation.

* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.