DECEMBER 2016


PE CAPITAL INVESTMENTS www.PEcapitalinvestments.com

By Eliseo "Jojo" Prisno, CRPC, MS Chartered Retirement Planning Counselor

The Trump Presidency and how It will affect the US economy

 

The election results last month caught everyone off guard including the market. When the polls closed and some semblance of an upset was developing, market futures went on a wild spin losing as much as 850 points on the DOW at one point. Most pollsters were projecting a Clinton win and the market was expecting such status quo however the biggest upset in US election history came into reality and took everyone off tangent. From the very beginning when Trump announced his bid for the top post of the land, Wall St. wasn’t really enthusiastic of his economic policy pronouncements. Reclaiming America in his rhetoric to make it “Great Again” is a great battle cry but his vague details seemed anchored on an economic wisdom of small government and large infrastructure redevelopment spending. Projecting growth targets of 4% which hasn’t been achieved for quite sometime is ambitious and will require massive investing which obviously will result to further borrowing.

Historically, this strategy was sound when the liabilities of the federal government where on manageable levels and America’s surplus projections were quite predictable. Such fiscal policy approach really fueled economic growth then, creating everyone productive because of the jobs made available to deliver the programs. However today we have realized that burden of these debts hampers the sustainability of the very economy that we try to stimulate. Our learnings so far is that if these investments do not deliver tangible returns then surely they remain as unproductive fixtures that has maintenance costs. These days simply adding flyovers, expanded airport runways, additional government buildings, few more miles of highways wouldn’t do much. We need critical infrastructures that in the long run would deliver hard savings to our coffers and reduce the colossal debt that we’ve acquired over the years.

Smart Infrastructures

If Mr. Trumps’ infrastructure redevelopment plans will be geared towards investments that will enhance further the “shared economy” concept that our millennials are embracing, then our expanded liabilities could be worth it. I’m talking about high speed trains that will connect urban centers so people wouldn’t have the need to drive, strategic economic hubs that will attract talents and encourage collaborations, energy sources that are renewable and does not degrade the environment, logistics centers that lowers the cost of handling goods further reducing its price, etc. These are concrete examples of infrastructures we need which in the long run will deliver return on investments.

An “Inclusive” America

Making “America Great Again” is not about being “exclusive”, we should bear in mind that our achievements during the past decades (technological breakthroughs like the internet economy, global financial leadership, biotech, etc.) were products of our being an “inclusive” society, encouraging the brightest minds from all over the world to come to us and bring their ideas into fruition in the biggest business incubator of the world. The “American Dream” is a consciousness conceived and develop by people who value the concept of hard work, perseverance and sacrifice. This mindset is something universal and not limited to those that are already settled in the naturally rich land that’s bounded between Mexico in the south and Canada on its north. Being “exclusive” is un-American and if Mr. Trump pushes this agenda to appease a “misinformed” lesser half (note that the other candidate got the popular vote), then his presidency will surely fail and goes with it is the world’s biggest economy.

Powerful Team to Push Agenda

Mr. Trump’s presidency will be enhanced with a unified congress, the very first in years and this will be a very formidable source of power for the executive branch. If he’s able to harness this blessing positively to ensure the sustainability of the American way of life, then he can push his economic agenda effectively. Mr. Trump’s personal values may not be palatable to the majority of the freedom loving Americans, but we have him as our president and it leaves us no choice but to support him and his positive attributes is his being a successful business person. However murky and questionable his business ethics are, bottom line he’s a self-made billionaire and that talent should be worth something. Maybe that type of talent is something the “New America” needs to bring us to the next level and that is to deviate from the current stagnation to a vibrant economy.
The key however to ensure that Mr. Trump’s ultra-right ideas will not get into fruition is VIGILANCE. Just like how we look at our personal investments, we should be extra vigilant and critical. This president-elect has the firepower that can gyrate the markets with wild swings and unseen volatility (just like the night when he got elected yet the next day things easily stabilized) thus we need our senses all attentive. And talking about potential “pronounced” volatility over the next 4 years, I suggest as an investor, try to work closely with a professional investment advisor to guide you with your exciting roller coaster ride during his presidency.


ABOUT THE WRITER: Eliseo Jojo Prisno is a Chartered Retirement Planning Counselor (CRPC) and holds a master's degree in engineering For over a decade, he has managed the wealth of select families and business owners. He founded P/E Capital Investments in 2010, a State Registered Investment Advisory Firm (CRD# 172695) and is currently the firm’s Managing Director and Senior Investment Advisor. Mr. Prisno also manages a Fund of Funds investment program with Ameritas and runs an All-Equity Growth and Income customized portfolios in separate accounts via E*Trade Securities.

He is also a licensed professional on insurance products and annuities. If you have questions or desire a complimentary analysis of your investments or retirement readiness, email j.prisno@PEcapitalinvestments.com or call 1-888-929-2825. Visit our website www.PEcapitalinvestments.com and our Facebook Page

 


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