Upon the news of Donald Trump's presidential win, the Dow Jones Industrial Average climbed past 44,000 for the first time on Nov. 8, according to a Nov. 11 report from CNBC.
Now, individual investors are asking what that means for the future of their money and long-term market performance.
Financial managers are warning their clients against making any major wholesale changes right now, and are encouraging investors to take a wait-and-see approach, according to the report.
While the markets favored Mr. Trump initially, it remains to be seen whether this upward trajectory will continue. Markets do not like uncertainty.
Many investors currently expect Mr. Trump to lead with faster economic growth and more market-friendly policies, but for individual investors, experts recommend basing asset allocations on individual situations, such as personal goals, time horizon and risk tolerance.
Mr. Trump is expected to loosen regulation, so some investors expect to see a boost for energy, financial and industrial stocks.
In addition, low taxes could be extended under a Trump administration. In 2017, he enacted the Tax Cuts and Jobs Act, which included a higher standard deduction, a $2,000 child tax credit and a $10,000 cap on the state and local deduction. It is set to expire in 2025, but could now be extended.
Both individuals and corporations are expecting tax cuts with Mr. Trump’s win. However, experts are also anticipating a potential rise in inflation.
The Federal Reserve helped to bring the pace of inflation down, close to its 2% target, but tariffs could increase prices on imported goods and services.
Inflation could also increase if individuals have more money in their pockets due to Mr. Trump’s pro-business policies and tax cuts, according to the report.