How to protect against a downturn in the market of a possible Trump re-election

How to protect against a downturn in the market of a possible Trump re-election

What if Donald Trump wins the election?

 

Firstly, I must tell you that I am writing this as an opinion only and in no way is what I say to be considered investment advice.

There are left wing individuals and groups (e.g. antifa) who have said they will burn America to the ground if Trump wins the election. They have already set large cities alight and looted private property. Should this happen it will trigger large falls in the Financial Markets.

I know in Australia, investors are reluctant to take some money off the table because they don’t want to pay Capital Gains Tax but I think it is prudent to lighten off your Portfolio’s and go to 20 or 30% Cash to prepare for an event that could be worse than paying CGT.

If you decide to sell out of some shares, then you can repurchase shares that will do better under whoever wins the election.

If you do not want to sell any positions, then you could just buy Put Options with say a February expiry as things might take a few months to play out.

If you are mainly exposed to the Australian Market then buy XJO options. They may become worthless but that is how insurance works.

Don’t necessarily believe the polls either because although Biden may be ahead in the overall vote it is the college votes that matter. This happened last election when Hilary received more votes but lost the election.

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Disclaimer:
This article does not take into account the investment objectives, financial situation or needs of a particular person or entity. Before acting on any investment strategy or advice you should first consult with your current ASIC accredited investment professional or seek out a compliant investment professional for such. 

About The Author

William Craig

(Bill) grew up on a Beef and Merino wool enterprise between Hamilton and Horsham in Western Victoria and attended RMIT and Monash University studying Business Law and accounting. Bill has a Sheep and Wool Handling Certificate, a Private Pilot’s Licence and has completed several post graduate courses and amongst other qualifications has gained an RG 146 Certificate and a Certificate in Financial Markets. Bill started out managing Sheep and Cattle Stations at Quilpie Qld, running 60,000 Sheep and 20,000 Santa/Shorthorn cross cattle before traveling in Europe and working in the accounts department of Dutch company Unilever. On returning to Australia, Bill took up the position of relieving manager back at the Queensland Station. Bill then acquired and operated a successful mixed wool/beef/winter cereal cropping and rice growing enterprise at Moulamein NSW. In 2003 Bill became a partner at McKeown Marrs Pty Ltd, a stockbroking and wealth management firm and then became a Partner in, and Director of, Greenard Willing Pty Ltd. Here his primary role was as global investment development manager specialising in Asia. Bill has also over a long period of time held the position of Chairman of Family Pastoral Company Holdings as well as Chairman of Family Companies specialising in a Portfolio of Stock and Derivative Investments where he has rotated between the positions of Chairman and Board Member.