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Investing Specialists

Economy Has More Than Trump Policy Uncertainty to Worry About

Our new president will likely inherit an economy that is losing steam.

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With earnings season behind us and only minor economic reports released this week, markets could focus full-time on the election and Donald Trump's surprising win. And focus they did.

Wednesday, after the election, investment-related firms spent all day gearing up for expected large market declines. Many companies, including Morningstar, set up calls to reassure investors, to encourage them not to panic, and to stick with their carefully crafted investment plans. With 5%-10% declines after the equally surprising Brexit vote in June and large overnight losses in many world markets, everyone was geared up for the worst. In retrospect, it looks like the focus of those calls should have been why Trump won't get everything he wants, and to remind investors of weakening economic fundamentals and relatively high valuations.

Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.