Trump’s Muslim travel ban spooks global markets: could be positive for investors
Although President Trump’s Muslim travel ban announced this week has shocked markets, instead of losing their nerve, shrewd investors will be seeking out inevitable opportunities.
The U.S.’s Dow Index fell below the key 20,000 mark on Monday, and the dollar was also affected by nervous sellers. The UK’s leading share index, the FTSE 100, also fell by nearly one per cent at the beginning of the week, following falls in shares in Asia.
Indeed, American markets declined below 20k on Monday, on cue from the weak European and Asian markets.
As I was quoted as saying in The Financial Times, Fintech Finance, Nasdaq.com, Investing.com, The Street and Investor’s Business Daily, amongst other media, in recent months, Donald Trump becoming the 45th U.S. President has, in the main, been regarded as positive for stocks.
However, it looks as though the rose-tinted glasses are now well and truly off as the travel ban for seven Muslim-majority countries shows investors that there could be significant geopolitical turmoil ahead as the controversy escalates.
Markets have been reacting to Trump’s 120-day hold on permitting refugees into the States, an indefinite ban on refugees from Syria, plus a 90-day ban on citizens from Iran, Iraq, Libya and four other nations. Indeed, many nations, including long-term allies of the U.S. such as the UK, have described the measures as divisive and discriminatory.
Although the markets are somewhat jumpy, I think it’s more of a glitch than a major obstacle. Of course, markets tend to adopt a knee-jerk reaction to unpredicted or controversial geopolitical events.
Furthermore, there is also the argument that markets were overvalued, with investors looking for a reason to sell. This latest measure by President Trump has now provided them with that reason.
Regardless of Trump’s Muslim travel ban alarming the markets, savvy investors won’t panic, instead they’ll be searching for bargains and, possibly, hoping the sell-off persists.
They will be aware of the fact that the world is changing rapidly. And with that change comes volatility.
Whereas some people may be put-off or avoid investing altogether during times of volatility, the majority of the most successful investors welcome it with open arms. This is because profitable opportunities can be found where there are oscillations in the market, meaning investment portfolios can be enhanced and investors can make the most of lower entry points.
As you would expect, the most effective investors will seek independent, professional financial advice to find the inevitable opportunities as the world gets used to Mr Trump being in the White House.