There seems to be an emerging expert consensus in favor of my belief that there will be a worldwide market crash if Trump is elected, but most commentators appear to think that, as with Brexit, a recovery will follow in short order. I’m less optimistic, because the analogy to the Brexit vote is flawed; the UK plays a far smaller role in the world economy than does the US, and Theresa May is not a chaos agent.
To illustrate this, consider what will happen if people all over the world start pulling their money out of the markets and looking for a safe haven. Under normal circumstances, that means US government securities. What happens once we have elected someone who has openly mused about imposing haircuts on the owners of US government debt? Will these really be viewed as safe investments anymore? Quite possibly not.
Investors will look next to China for stability and safe investment opportunities, but the Chinese economy isn’t designed for that kind of FDI, and the Chinese, in any event, have their own problems. So where do you go after that? Gold, perhaps?
The bottom line is that you might want to keep plenty of room in your mattress for your assets if Trump is elected. There may be no better option.