The past few months have been filled with intense campaign rhetoric, commercials, and commentary stemming from both sides of the political aisle. We recognize that many of our clients have had a feeling of uncertainty and distrust in what has been happening in the economy and political environments. For some, that feeling might have been calmed after Donald Trump’s win, but for others the feeling of uncertainty may be even more heighted. We would like to take this opportunity to help provide some perspective on what this election result means for your investments.

Tuesday night, as electoral votes were adding up in Trump’s favor, the Dow Futures Index plunged as much as 800 points. Markets had already priced in a Clinton victory and having the expectation turn opposite certainly had an effect. However, after a full day of trading on Wednesday, the Dow actually closed up more than 250 points and posted its best weekly performance since 2011.

The conciliatory stance Trump portrayed in his acceptance speech early Wednesday morning was positive for markets, and clearly went a long way to stem jitters that dominated the future markets only hours earlier. In addition to Hilary’s gracious concession speech and Obama’s supportive congratulatory speech, markets seemed to move higher on optimism that Trump’s presidency will be positive for the overall economy. Now that the election is behind us, it is likely that if Trump comes across as a unifier, his presidency may not impart as much uncertainty as originally anticipated. Markets will likely react favorably to plans from Trump that focus on his pledges for tax reform, infrastructure investments, and deregulation.

Overall, Trump is inheriting an economy that is in pretty good shape. Real economic growth has picked up in recent months while the unemployment rate is close to full employment. S&P 500 earnings have rebounded nicely from the oil and dollar weakness last year, and inflation is still moderate. Additionally, the global economy is showing signs of life as the global manufacturing purchasing managers’ index hit a two-year high in October. Uncertainty and volatility following the U.S. election will likely reduce the probability of a Federal Reserve (Fed) rate hike in December, although the Fed will want to leave its options open until it can assess the market and economic fallout from the election result.

Even though the election resulted in a Republican sweep, we expect actual policy change to be far less dramatic than was proposed by Trump during his campaign. There is a wide gulf between Trump’s agenda and that of many “establishment” Republicans, who will be resistant to unfunded tax cuts or spending increases. Also, both the new President and Congress will likely act more slowly on dismantling the Affordable Care Act and trade agreements until some alternatives can be found.

While the current Trump agenda is unlikely to be implemented in full, members of Congress may be willing to go along with some proposals to increase spending, lower taxes, reduce illegal immigration and increase tariffs. If they do so, U.S. and global stocks will likely outperform in this type of environment while treasury bonds lag.

Again, we stress the importance of diversification in your portfolios and take caution not to let what you feel about politics impact what you feel about your investments.