In Perspectives

If there’s one thing this election year should have taught us by now, it’s to expect the unexpected.  On November 8, Donald Trump again defied expectations and was elected as the next President of the United States, and he will be supported by a fully Republican-controlled Congress.

Although it initially appeared that we were going to be in for a sharp selloff on Election Night as the results were coming in, market losses began to reverse once the outcome was settled and Trump made his conciliatory victory speech.  By the time the U.S. stock market opened at 9:30am on November 9, investors had calmed and the Dow and S&P quickly began posting modest gains.  Since the election we have continued to see a U.S. equity rally. Expectations for increased federal spending, tax reform and a less restrictive regulatory environment appear to be supporting the market boost.

Market segments that have shown particular strength since the election include:  1) biotech and pharmaceutical companies, as Clinton was widely seen as a threat to the industry given her expected scrutiny of drug price increases; 2) stocks that are poised to benefit under increased infrastructure spending, such as industrials, materials and resource companies, and 3) defense stocks, as Trump is seen as likely to increase military spending.

Despite the recovery in U.S. markets, emerging market equities are selling off and are down 6% so far this month, as this segment of the market includes countries like Mexico, China, and Russia where Trump’s victory could have direct and uncertain consequences.  Obviously it is anyone’s guess at this point what President Trump’s foreign policy and trade policy will actually look like as he shifts from campaigning to governing.

Within the bond market, the U.S. Treasury yield curve is steepening.  Longer-term interest rates are moving higher as Trump’s plans to increase spending are seen as a potential boost to inflation. On the short end of the curve, the widely expected December interest rate hike appeared to be somewhat in doubt in the immediate aftermath of the election, but Janet Yellen has since testified to Congress and made very clear that she expects the hike to occur as planned.

As always, the events of the past two weeks have shown us again how dangerous it is to try to time or trade in anticipation of macro events.  Countless financial, media, and political experts were proven wrong on November 9, both in terms of the election outcome and the subsequent market reaction.  Our message continues to be that strategic investment plans have been established for good reason, and deviating from those plans based on a near-term uncertainty is almost always a bad idea – and a costly one as well.

Legacy Trust and Your Right to Financial Privacy

At Legacy Trust we have established policies and practices that respect the financial privacy of all individuals who use our trust company. We believe it is critical to comply with the laws and regulations designed to secure your financial privacy. Your relationship with us as our client is very important to us, and we want you to understand our policies and practices about handling your information.

This Policy applies to you – This Policy applies to our relationships with individual clients who inquire about or obtain products or services from us for personal, family and household purposes.

Strict security measures – We take the security of information very seriously. We have established security standards and procedures to prevent access to client information. We maintain physical, electronic and procedural safeguards to guard client information.

Limited employee access – We have established procedures to limit employee access to information to only those employees with a business reason for accessing such information. We educate our employees about the importance of confidentiality and client privacy. We take appropriate disciplinary measures to enforce employee responsibilities regarding client information.

Why we collect information – We collect information about you to:

  • accurately identify you;
  • protect and administer your records, accounts and funds;
  • help us design or improve our products and services;
  • understand your financial needs;
  • save you time when you apply for new products and services; offer you quality products and services; and comply with certain laws and regulations;

We collect information – We collect and maintain your personal information so that we can provide investment management and other services to you. The types and categories of information that we collect and maintain about you include:

  • Information we receive from you to open an account or provide investment advice or other services to you (such as your home address, social security number, telephone, financial information and investment objectives).
  • Information that we generate to service your account or from our transactions with you (such as account statements and other financial information).
  • Information on your transactions with nonaffiliated third parties.

We have established procedures so that the financial information we collect is accurate, current and complete. We are committed to work with you to promptly correct any inaccurate information.

Our selective sharing of information – In order for us to provide investment management and other services to you, we do disclose your personal information in very limited instances, which include:

  • Disclosures to nonaffiliated companies as permitted by law, including those who help us service your account (such as providing account information to brokers and custodians).
  • Other limited disclosures as permitted by law, for example, required reports to government entities.

We do not share your information with third parties for marketing purposes. We do not sell your information.

Former clients – If you end your relationship with us, we will continue to adhere to the privacy policies and practices described in this notice.

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USA PATRIOT Act

Important Information About Procedures For Opening A New Account

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.

What this means for you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

We apologize for any inconvenience this may cause; however, federal law prohibits us from waiving these requirements.

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