Something to shout about: Since Donald Trump won the election on November 8, the U.S. stock market has risen by 3.2 per cent
A yellow taxi is cut up by another car and the driver honks his horn violently.
Steam rises from a manhole cover on a side street and, above, the December sunlight flickers off the tinted glass of a skyscraper. It could be a normal Sunday morning in the heart of New York — except it’s not.
On the corner of Fifth Avenue and 57th Street — a stone’s throw from the city’s giant Central Park — a camera crew has taken up residence. Nestled between their wires, coffee cups and camping chairs, three large lenses point at an enormous black skyscraper across the street.
They’re hoping for the slightest glimpse of Donald Trump, who lives in the penthouse suite of the 58-storey building.
Mr Trump has changed everything.
With his talk of building a giant wall on the Mexico border and locking up his opponent Hillary Clinton, his victory in the U.S. presidential election has stunned America’s financial capital. It’s all you’ll hear about in bars and restaurants.
Someone emerges from the crowd outside Trump Tower with a cardboard sign hanging from his neck that says: ‘Santa, please take Trump to the North Pole‘.
Any saver with cash to invest would think this troubled superpower is surely a place to avoid. But scratch beneath the surface and you’ll find there’s more to Mr Trump’s plans than meet the eye.
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Everyone I speak to seems to agree that, in the short term, Mr Trump’s policies might boost America’s economy. It’s the long term where real problems may lie. Kim Wallace, director of political consultancy Renaissance Macro Research, says: ‘The White House is a powerful institution and the ability to put in checks and balances [to keep a President in line] is proven.
‘But it takes time, so in the long term, it’s anyone’s guess whether Mr Trump can get through things in the background that have a [negative] effect on the economy.‘
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Since Mr Trump won the election on November 8, the U.S. stock market has risen by 3.2 per cent, turning £10,000 into £10,320 in weeks.
Usually when there is political uncertainty, stock markets go down because companies can’t plan for the future and professional investors stop investing until the picture becomes clearer.
But Mr Trump is, at heart, a businessman and many investors think that despite his comments about immigration (building that wall on the Mexico border) and women (there was huge controversy when he was exposed for making comments in the past about ‘grabbing‘ them inappropriately), he will do whatever it takes to boost America’s economy.
Policies that could power the U.S. economy include lowering corporation taxes from around 35 per cent to as little as 15 per cent. It would immediately increase companies‘ bottom lines.
Another of Mr Trump’s big policy promises is to spend on infrastructure — building roads, bridges, tunnels, airports, ports and waterways. But Matt Ward, manager of the Schroder ISF US Large Cap fund, warns it will not all be plain sailing: ‘Mr Trump is a businessman at heart, so I do see the economy getting a fillip in the short term from his policies. But there’s an awful lot of wishful thinking — stock markets are taking all the positives of a Trump presidency and none of the negatives.‘
One of the companies Mr Ward is backing is the Monster Beverage Corp. Two-thirds of the U.S. economy is driven by consumer spending. This part of the economy has shown to be in ‘good shape‘, Mr Ward says.
Other companies he’s backing include internet giant Amazon and technology firms such as Facebook. These firms get a huge boost as more people use the web on smartphones.
Jenny Jones, head of US Mid & Small Cap Equities at Schroders, says banks could benefit from Mr Trump’s plans to relax the rules around how much cash they must hold on reserve when they issue loans. ‘The banking sector is up 20 pc since the vote,‘ she says.
WHY THE U.S. COULD BE A GOOD BET
The biggest rise in the Dow Jones was in 1984 when Ronald Reagan won a second term in office — the index climbed 27.7 per cent in the subsequent year.
On each of the four occasions a Republican has replaced a Democrat as president, the Dow Jones index has fallen by an average of 8.8 per cent.
Since 1929 the S&P 500 has returned an average of 14.7 per cent a year under Democrat presidents and 5.4 per cent a year under Republican presidents.
The biggest fall was when Jimmy Carter came into office in 1976, when the market dropped by 15.2 per centover that year.
The first trillion dollar company is forecast to happen in the next few years with Apple, Google and Amazon among the top contenders.
When there’s a change from Republican to Democrat leadership or vice versa, the gold price typically rallies 10 per centwithin a year but equities fall 6 pc over three months.
The New York stock exchange deals with an average 4.2 billion share trades a day — the lowest ever was on March 16, 1830, when just 31 took place.
The Philadelphia stock exchange is the oldest in America and was founded in 1790. It was originally based in a coffee shop.
Unlike Britain, the U.S. still has many smaller regional banks that serve local communities. It’s these firms, which don’t rely on overseas markets, that could benefit from a Trump presidency, Mrs Jones says. For those who like the idea of investing in U.S.-based smaller firms, Jason Hollands, director of investing firm Tilney Bestinvest, recommends putting money into a fund called T Rowe Price US Smaller Companies.
It has turned £10,000 into £24,390 over the past five years by investing in firms such as Ball Corporation, which is the world’s largest producer of metal food containers.
He also tips First State Global Listed Infrastructure Fund, which in the past year, turned £10,000 into £13,000.
It invests in companies such as Texas-based Kinder Morgan, which controls around 84,000 miles of gas pipelines and should be one of the firms to get a lift from Mr Trump’s plans for infrastructure.
Savers who see U.S. firms benefiting from Mr Trump’s plans to boost economic growth could also invest in a fund that simply tracks the overall stock market.
Laith Khalaf, senior analyst at investment firm Hargreaves Lansdown, recommends Legal and General US Index, which has turned £10,000 into £23,360 in five years.
kursi sudut minimalis dan harganya Hyde was a guest of Schroders on a visit to its fund management team in New York.