Well, finally we’ve reached the day when we learn who will be the next president of the United States. Hopefully. With the latest polls showing a decisive lead for Hillary Clinton, the markets have roared and pundits are saying that it’s because investors think a Donald Trump win would be bad for stocks. But speculating about the election outcome based on polling data can be fraught with risk, as recent history has taught us. The Brexit vote outcome and the Colombian/FARC referendum are recent examples that oftentimes the polls can be way off base.

Whatever the outcome, MRP believes the most important near-term consequence of this election for the markets will not be the effect of SCOTUS judge appointments, trade, immigration, regulation, or even tax policies. These are, of course, critically important and will have a major effect in the long run. But over the next year, MRP believes the biggest effect will come from monetary policy and its effect on the dollar’s exchange rate . . .

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