Trump's America: How will it affect the finance sector?
Just one week into his presidency, President Trump showed he has no intention of going back on his many hard line promises. This leaves many wondering what the impact on the financial sector will be and what it means for Australians.
The current situation
There is significant uncertainty around the long-term impact of Trump's policies, but already economists are debating scenarios. While US stocks climbed during the first week after the inauguration, many analysts are predicting volatility, which could lead to both threats and opportunities for investors. In an article published in The Conversation, Deakin University's Benjamin Isakhan and Zim Nwokora state, "It is impossible to know for sure what a Trump presidency would be like. But there are sensible reasons to suspect it could be disastrous – not only for the US but also for Australia."
As Warren Buffet famously said, "Be fearful when others are greedy and greedy when others are fearful"
For instance, if Trump follows through on his threats to label China, by far our largest trade partner, a currency manipulator, there could be significant repercussions for our economy. A drop-off in American demand for Chinese manufactured goods could see reduced demand for Australia's raw materials such as coal, iron ore and other commodities used in the production of those goods. In this scenario, a trade war between the US and China could be negative for Australia.
There is also the potential for Trump's big spending, low tax approach to put upward pressure on US interest rates. This could keep the Australian dollar subdued and allow our Reserve Bank to increase rates. However, HSBC's chief economist Paul Bloxham sees things differently. In the Daily Telegraph, Bloxham considered that reduced China/US trade could benefit us through increased infrastructure spending policies out of Beijing. In this case, we could see a rise in Chinese demand for Australian exports.
Adapting to a more polarised environment
Of course, any volatility may lead to a change in spending habits for everyday Australians and finance brands will need to adapt their content marketing plans accordingly. Many Australians still have the impact of the GFC fresh in their minds, so if people begin to once more feel threatened by the state of the economy, an increasing number may look for sound advice and a safe place for their money. It could present a great opportunity for brands to build trust by creating valuable content filled with reassuring advice.
On the one hand, some investors may look to capitalise on the changing economic landscape. As Warren Buffet famously said, "Be fearful when others are greedy and greedy when others are fearful". Content marketers may wish to target this group by making them aware of less known financial products that are widely used by savvy investors in volatile markets. Either way, get to know your customers. Understanding search behaviour and where your users are seeking the type of information you want to promote will help you generate leads more efficiently.
Don't be afraid to write longer articles to make your point either. Search engines are becoming a lot more sophisticated and, since Google changed their algorithm again, they favour quality content over keyword-heavy texts. Finally, encourage action. In times of uncertainty, you don't want to leave your customers hanging.
During times of big change, when some gain, more often than not others lose - and this is exactly the lesson being sold by Trump's school of 'realist' foreign policy thinking.
For now, it's a wait and see game.
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