Did electing Trump lose you thousands of dollars?

November 9, 2016

This article isn't about politics - let's put that away for a moment and look at the cold, hard facts. Electing Donald J. Trump to the presidency may have just lost the average American thousands and thousands of dollars overnight. Here's how:

 -Global markets fell sharply after Tuesday’s election 
Around 2:30 a.m. ET, when the election was called by the press for Trump, Dow futures dropped about 520 points and S&P 500 futures fell at least 3.4%. Stock futures, international benchmarks, and certain currencies also crashed sharply immediately following the news. 


For weeks, a Clinton victory had been priced into the stock markets, sending stock prices higher. But now a surprise Trump victory has already begun to erode that growth, sending domestic and international markets into turmoil. 

(Even if you think that stock market prices don't effect you personally, you're probably wrong.)
 -If you have ever put money into a company 401(k), IRA (Individual Retirement Account), or bought any investment at all, this drop means that you probably saw thousands of dollars wiped out overnight. The Average 401(k) Account contains over $96,000, meaning a 5% drop would eliminate over $4,814 in savings for the average American instantly. A 15% decline would wipe out over $14,443, hitting older Americans and retirees even harder. 


 -Even if you have never invested a dime in the stock market, it impacts bond prices, which ultimately determine how much you pay for a mortgage or other loan


-Pension plans get hurt, including public pensions which taxpayers are responsible for


-In down economies, companies are often forced to cut back on their employees’ retirement, healthy care and dental plans.

 
-Regardless of what Donald Trump says about bringing more manufacturing jobs to the US, a lower stock market usually means that more people lose their jobs.

 

Economists predict that inflation will rise, meaning everything you buy will likely cost you more.
The price of all imported goods is expected to increase sharply under Trump protectionist policy - especially on electronics, with Trump proposing 35% tariffs on consumer goods such as TVs. This tax on business is invariably a cost that is ultimately passed on to the consumer.
 

Trump’s win set offs financial jitters and immediate unease among international allies
-Donald Trumps proposed foreign policies, which have included building a wall along the Mexican border, temporarily barring Muslim immigrants from entering the US, questioning longstanding commitment to NATO allies, cutting foreign aid, and eliminating certain international trade deals have (understandably) generated immediate unease with international allies. 


Gold and US Treasuries, two investments that people usually make when the markets enter periods of extended turmoil, are among the few to rise. 

 

24 hour update: markets have recovered most of the lost ground, and we will continue to monitor the situation. 

 

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