Why investors’ “Trump trade” might be flawed

Political risk—the notion that an election might have a meaningful impact on financial markets—used to be something that was the concern of emerging-market investors. Those in rich countries paid attention to central bankers, rather than politicians. Things are a little different today. In the run-up to America’s presidential election on November 5th, asset prices have moved alongside polling averages. Wall Street hums with talk of the “Trump trade”.