Yesterday’s Presidential election result, while not viewed as the likely outcome, was always a possibility. Sometime in the early hours of Wednesday we were reminded that unexpected events do occur. As the past reminds us, the best strategy for preserving wealth is to avoid placing large bets on one outcome, no matter how certain it may appear.

With the elimination of one uncertainty–who will be our next President–we are now faced with the new uncertainty of whether the Trump Administration will be good or bad for the economy and financial assets. It is highly unlikely that this is the end of the world (as some may feel personally), nor is it a radical populist revolution which will materially increase opportunities for certain populations. There is uncertainty, but investing is always about navigating in a sea of unknowns. Bond investors must grapple with how interest rates will change and whether bonds will be fully paid off at maturity. Equity investors concerns are mainly how future earnings of corporations will grow or decline. Investing is about being paid appropriately for the risks taken – a strategy best implemented through globally diversified portfolios. If we were to take no risk, the return would be 0.25% (return on the one month U.S. T-Bill on 11/9/16), a negative return after inflation.

In summary, no one knows whether the new Administration will be good or bad for investments. Some predict that increased spending, less regulation, less immigration, and lower taxes will have a positive effect. Others predict that higher trade barriers, less immigration and increased geopolitical risk will lead to a recession. While uncertainty has increased, it does not necessarily imply lower returns compared to what we would be facing with a different election outcome. It remains important to not let our personal political preferences distort our ability to stay the course towards our long term goals.