October 10, 2016
Successful investors must remain optimistic. It can be quite challenging at times, especially in a world so full of negative rhetoric, terrorism, and of disagreement.
Ultimately, the question of Hillary or Donald is temporal and America will continue forward. However, politics and policies matter and can have profound impacts on the economy. How do each of these candidates compare regarding economic issues?
Taxes and trade are the two current policy choices that have the most profound impact on the economy. Taxes are complex, and their impacts are often hotly debated. However, one thing is certain: The flexibility of reform for either candidate is limited. The liabilities of the US Government continue to exist, and both candidates have had limited discourse on reforming expenditures. Therefore, one may believe that the top 1% or the bottom 99% should carry a greater burden, but the burden remains. Fairness is not the primary determination of economic growth.
Trade, however, is another matter. On this issue, this election has become decidedly protectionist. This has true economic repercussions, and in Cutler’s view, denies the reality that no other country has benefitted more than ours from free and open trade. On this matter, Hillary has seemingly more in common with the Republicans in Congress than Donald. And on this matter, we believe there is great economic risk. A trade war with China is, in Cutler’s view, the wrong policy toward America’s most important global partner in the 21st Century.
Make no mistake, this election will have real consequences. Despite the trite nature of the campaigning, the outcomes vary greatly. But, as investors we look for optimism and we find it in the following places:
There is no better country to invest. Our markets are liquid, generally hold less risk, and have many of the world’s most successful companies.
There is no more stable political system globally. Despite political uncertainty, we know that our democratic structure is stable.
There is no country with a more well-defined rule of law. Just look at how complex our tax code is!
There is no country with as many resources to build and grow a business. After all, companies around the globe want a footprint in the US consumer market.
Notwithstanding the unknowns of this current election, in Cutler’s view these statements will remain true whoever assumes the Presidency.
These blogs are provided for informational purposes only and represent Cutler Investment Group’s (“Cutler”) views as of the date of posting. Such views are subject to change at any point without notice. The information in the blogs should not be considered investment advice or a recommendation to buy or sell any types of securities. Some of the information provided has been obtained from third party sources believed to be reliable but such information is not guaranteed. Cutler has not taken into account the investment objectives, financial situation or particular needs of any individual investor. There is a risk of loss from an investment in securities, including the risk of loss of principal. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for a particular investor's financial situation or risk tolerance. Any forward looking statements or forecasts are based on assumptions and actual results are expected to vary. No reliance should be placed on, and no guarantee should be assumed from, any such statements or forecasts when making any investment decision.