“Policy changes could reshape return potential for companies across the US market. Here’s how investors can start thinking about the challenges ahead. US stocks are widely seen as big beneficiaries of President-elect Donald Trump’s policy agenda. But policy change takes time and will have complex effects on businesses, earnings and returns. So how can investors prepare to detect risks and uncover long-term opportunities amid the uncertainty? Whatever your views on the election, the market consensus believes the new administration is good news for American businesses and stocks. Yet while Trump will be supported by a friendly Republican Congress, translating campaign promises into policy is always difficult—and will take time. Top-Down Change Requires Bottom-Up Research. On the campaign trail, Trump pledged to pursue policies including subsidy suspensions, extended tax cuts, new tariffs and regulatory reform. This combination of policies is likely to increase the deficit, even if economic growth is strong, which could complicate its implementation.”
Morten W. Langer
