The question of the day is ‘what impact will the Trump presidency have on global and South African markets?’ The honest answer is ‘nobody knows’.

It is not possible to comprehend how markets may change with thousands of parties and counter-parties making decisions based on changing and uneven information.

Experts believe that the ‘Trump tariffs’ will increase inflation, so the market now expects US interest rates to stay higher for longer. This has helped strengthen the US dollar. In the stock market, investors are hopeful that Trump’s presidency will mean lower taxes and fewer regulations, which are good for business.

President-elect Trump and his advisers support cryptocurrency, and Bitcoin’s price rose 30% between the election and inauguration. Cryptocurrency has no intrinsic value and unlike national currencies there is no institution to back it. Still, it appeals to those who do not trust the government (or bankers) to protect their money’s value. Many Bitcoin holders are proud, believing they have outsmarted the experts who dismissed crypto.

Until now, cryptocurrencies have existed with little regulation, but Trump promises to bring them under mainstream rules.

This increases the risk of a crypto bubble, where prices rise too fast due to speculation. A warning sign of a bubble is when everyone, even your taxi driver, is talking about Bitcoin.

South African law does not allow our Fund to invest in cryptocurrencies, but if the market crashes, cryptocurrencies could still affect other investments.

Trump supporters, like Elon Musk, focus on results and may prioritise efficiency over social concerns. It is hard to balance efficiency with social concerns, and too much focus on one or the other can be risky. If the US government becomes more efficient, it could boost the US economy more than expected.

There is a view that Trump’s ‘America first’ policy is likely to fail over the long term. Large US companies cannot afford to be hurt by isolationism and bullying.

While Trump’s policies may temporarily slow emerging markets, they could also strengthen trade between these countries. The challenge is that many outcomes are possible, both good and bad, making predictions difficult.

The best approach is long-term investing, avoiding speculation, and being prepared to act if the market falls sharply.

The trustees and their investment committee follow a solid process for determining the Fund’s investment strategy. It should be comforting to know that they put much effort into constructing diversified portfolios designed to be resilient over a range of market conditions.