Whether or not you wanted Trump to win the US election last week, the result most likely came as a huge surprise to you. Polls up until Tuesday had put Clinton on top by a few percentage points after all the scandals had settled. Some financial analysts had called for as much as a 10% drop in major stock indices if Trump won and compared it to the market chaos that followed the Brexit vote.
If you read the sport-like play-by-plays the night of the election, you likely even saw evidence of the collapse as Trump's win became more apparent. The seductive "after hours" trading showed markets tumbling before they were even open for regular trading the next day! For those not familiar with after hours trading, it is the few hours after the stock market closes each working day where investors can still place trades. Your account must be eligible for this feature, but an important thing to note is that liquidity is very limited in after hours trading. This is because most investors have already spent the entire day trading and may not want to sacrifice their evenings on doing more trading. So, for those that do trade after hours, to find a buyer or seller means you may have to accept a lower or higher price if you insist on having the trade occur before the next day. Based on that, the prices that shares are being traded at during after hours trading do not have much correlation with the share prices seen the next day.
The following graph shows the extent of the election on the main Canadian stock index, the Toronto Stock Exchange (TSX). The index tracking it is the S&P TSX Composite Index.
Although some stocks did react quite negatively to the election results (such as automotive stocks), the change between close on November 7th and close on November 8th is almost nothing for the overall TSX Composite Index. And just to be sure, even a week later, after all of the memes, jokes and worries about Trump have taken the internet, the overall movement of the TSX is less than 50 points. Heck, I can zoom out 6 months and you can see that the overall effect of both Brexit and the US election are insignificant.
The key to remember here is that basing your investments off of individual events like elections is not a good strategy. What you will find is that if you invest in high-quality, fairly- or under-valued companies with skilled management and good businesses, you don't have to keep buying and selling the companies to chase the ups and downs or predict macro events.
Treat the companies you own like the real businesses they are and they will treat you like the real owner you are!