What I do know, is that a lot of our clients are asking themselves – or us – what the outcome of the election means for the financial markets.
Is volatility going to increase? Would economic growth be impaired? What about the dollar and interest rates?
No, I won't go into financial detail. Instead, here's a bit of British political history. The late Margaret Thatcher, prime minister from 1979 to 1990, famously said that "there's no such thing as society. There are individual men and women and there are families."
Her words have an interesting pertinence to our present outlook. Of course, there is indeed such a thing as a market. You can actually buy the market, if that's what you want to do.
We don't do that. We buy individual securities. Bonds issued by presumably strong corporations and banks, or stocks in profitable, healthy companies. Of course, these may be affected as well – we just have to find out how.
So ... here goes:
Will the Swedish real estate company M2 Asset Management default on their bonds, with a loan to value of some 30%? Is the election going to make Norwegian network operator Ice Group default on their bonds? What about the bonds in Finnish forest industry company UPM-Kymmene?
As for stocks, will Lerøy Seafood Group make less money selling fish? Will fertiliser giant Yara see falling free cash flow as a result of the election? And would it erode profits at Microsoft or Swiss health care company Roche, or perhaps the Norwegian energy company Scatec Solar?
Well, that may certainly be the case, but it's hard to see why these companies should be materially afflicted.
That's not to say that no companies in any market would feel the impact of the political uncertainty or the political choices of the US president for the next four years. These companies, however, are selected precisely because we believe they can withstand such turbulence and continue to prosper and grow.
We may be wrong, and we'll most certainly appear to be wrong many times in the future, but we believe strongly in our philosophy. This company is not for turning.
Finn Øystein Bergh
Chief Economist & Strategist
Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on, market developments, the portfolio manager’s skill, the fund’s risk profile, as well as fees for subscription, management and redemption. Returns may become negative as a result of negative price developments. This is marketing communication.