As commentators took in the results of the US poll and continued to speculate on what markets would make of such a contrary result, there was one major question on investor’s lips: what should we do?
In many cities, investors saw the volatility as a buying opportunity.
Some point out that, even as the press ran hard with doom and gloom over the prospect of a Trump victory, the American economy performed reasonably well.
According to The Australian: “ ANZ has been pushing the defensive nature of its ETF (exchange trade fund) suite of products, while at the other end of the market, CFD provider IG Markets has unleashed a new marketing campaign around the theme that US election markets will always “offer opportunity” .
Over the longer term, the paper says the US Dollar will rise on a Trump victory, meaning the Aussie will fall (the Commonwealth Bank has suggested by as much as 10 per cent).
Indeed, according to The Weekend Fin Investors could buy volatility, for example, which would rise in value if the volatility index jumps.
But that kind of insurance has got more expensive – the CBOE Volatility Index rose 14.3
One guy you might want to learn from is legendary investor Warren Buffett. According to Bloomberg, his Berkshire Bathaway Inc company has $US85 billion ($A110 billion) in cash right now.
“He’s got a lot of ammo” for investments, said Bill Smead, who oversees about US$2.1 billion including Berkshire shares at Smead Capital Management. “Eighty-five billion dollars is a lot of money.”
And that’s the truth.