Horizon Investments' Greg Valliere bemoans election tone, economic growth

If Republican frontrunner Donald Trump wins, Mr. Valliere says he'll be rooting for “a really windy inauguration day”

Apr 19, 2016 @ 9:00 am

By Jeff Benjamin

Greg Valliere
+ Zoom
Greg Valliere

As election years go, Greg Valliere, chief global strategist for Horizon Investments, called the current one the “nastiest” and “most unserious” he has ever seen.

“I've never seen anything like this in my life,” he said Monday in Orlando, where he was the keynote luncheon speaker at the IMCA annual conference.

In his frank analysis of the presidential election, and it's ultimate impact on the economy and the financial markets, Mr. Valliere made it clear that he isn't rooting for any particular candidate. But, added that if Republican frontrunner Donald Trump wins, he will be rooting for “a really windy inauguration day.”

Assuming Mr. Trump is the eventual nominee against Democratic frontrunner Hillary Clinton, Mr. Valliere does not expect the nasty tone of the campaigns to change for the better.

(Related read: How the 2016 presidential candidates stack up with advisers)

He described Mr. Trump's momentum as largely grounded in the support of “mostly white men in the middle of the country who are angry, because they have had stagnant incomes for a decade.”

In terms of his chance of wining the presidency, Mr. Trump's biggest weaknesses, according to Mr. Valliere, are his high disapproval ratings among Hispanics, his lack of foreign policy experience, and his age. If elected, Mr. Trump would be the oldest president ever entering the office.

The challenges facing Mrs. Clinton are equally significant, even though she has long been seen by most political pundits as inevitable to win in November.

“Hillary is hardly a shoe in, even though she's the favorite,” Mr. Valliere said.

Among the points stacked against the former Secretary of State, he said include the difficulty for the same party to win three consecutive presidential terms, and “the damage inflicted on her by Bernie Sanders.”

Mr. Valliere said the Vermont senator has not only “tied Hillary to Goldman Sachs,” but has “inspired an entire generation of young people” to support Mr. Sanders.

That second part is something Mr. Valliere said the financial services industry should be concerned about. “These young people have developed great antipathy for banks and Wall Street,” he said. “Sanders has done a very bad thing to Hillary by tying her to Goldman Sachs, and you have to wonder if all these young people will turn out in November for her.”

Other obstacles facing Mrs. Clinton's run, he added include near constant campaign trail gaffes by her husband Bill Clinton.

“Bill is constantly making it about him, and at least once a week the Clinton campaign has to clarify or apologize for something he said,” Mr. Valliere said. “And then there's Bill's sexual history. I've been told he's no longer dating, but Trump has made it clear the Bill's sexual history will be a part of the debate. And Hillary will have to perhaps face allegations that she looked the other way or even worse, enabled it.”

Mr. Valliere also cited two troubling polls showing that Mrs. Clinton's negative approval ratings are over 50%, and “the majority of Americans say they don't trust her.”

“The only way to get elected president when most people say they don't trust you, is that they trust your opponent even less,” he said.

Mr. Valliere said the ultimate wild card for Mrs. Clinton involves all the investigations surrounding her related to the Benghazi terrorist attack on a U.S. Embassy, the Clinton Foundation's finances, and her use of a personal email server while she was Secretary of State.

“The FBI is in the home stretch with the investigation into her server,” he said. “They are already interrogating her closest aids, and they will eventually interrogate her.”

In terms of how the financial markets would react under each of the frontrunners, Mr. Valliere started with Mr. Trump and how much the markets hate uncertainty.

“Trump would be the mother of all uncertainties,” he said. “He has virtually promised a trade war with China, there is major friction between him and the Federal Reserve, there's the enormity of his proposed tax cut, and he's talked harshly against the market themselves.”

While Mr. Valliere expects Mr. Trump would surround himself with experts, it doesn't appear that he has done that yet.

“He is talking about taking at least half of all Americans off the tax rolls, and creating a $10 trillion revenue hole that he says he will fill by getting rid of waste, fraud and abuse, which tells me he doesn't have a plan,” Mr. Valliere said. “Sometimes when I see Trump's comments on the markets I have to check to see if it's Elizabeth Warren talking.”

(More election insights: Wells Fargo: Election year is hurting U.S. equities)

A Hillary Clinton presidency, he said, would also come with its own uniqueness.

“While I think the senate will flip to the Democrats, I think most of what Hillary tries to do will be thwarted by Congress because the Republicans will maintain control of the House,” he said. “She is part of the group that likes to regulate everything from clean air to the amount of salt in our diets. And because of her gender she might be challenged militarily, but Hillary has far more testosterone than Barack Obama.”

In one piece of sad reality, Mr. Valliere predicted that, “The purest investment play in Washington is the defense sector, which does well under either party.”

Backing up his claim that “this is the most unserious election ever,” Mr. Valliere pointed to the absence of any campaign talk about some of the more serious issues facing this country, including a fast-growing heroin epidemic, a nuclear arms build up in the Middle East, and a virtual lack of economic growth.

“I do not see this economy headed toward recession, because I see some decent growth and an improving labor market, I just wish we had some adults to talk about these things,” he said. “But not in this election. No way. This will devolve into the nastiest election of our lifetime, guaranteed.”


What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

Oct 17


Best Practices Workshop

For the fifth year, InvestmentNews will host the Best Practices Workshop & Awards, bringing together the industry’s top-performing and most influential firms in one room for a full-day. This exclusive workshop and awards program for the... Learn more

Featured video


Tech tools of tomorrow: Innovations your firms can't live without in 2020

Gadget Girl hits the tech pavilion at Pershing INSITE to see what exciting new tools advisers can't afford to miss.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Brian Block denies cooking the books at Schorsch REIT

Former CFO claims everything he did was 'appropriate' and 'correct.'

Interns will take on several roles at advisory firms this summer

College students are helping with client prep, firm visioning and long-term projects, among other duties.

10 funds with largest 3-year outflows

Even well-managed funds that have beaten the S&P 500’s 10.1% average annual gain have watched investors flee.

Wirehouse training programs are back

At one time, major brokerage houses ran large, expensive training programs for thousands of young brokers, and now it looks as if they are about to return to that model.

New military pension rules need financial advisers to step up and serve

Matching defined contribution plan expected to see more money, more need for sound advice.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print