A sudden change was noticed with the stock markets with the election of Mr. Donald Trump. Current week results showed a boom in stock markets and crossed last 2 years figures whereas U.S Bonds suffered losses more than $1 trillion. There was a clear indication that Mr. Trump encourage spending of money on roads and bridges that will lead to growth and inflation. It will be good for equity, but attracts negative impact on government bonds. The rapid changes by the President will not influence on the system in overnight and basic investment principles will be applied irrespective of whoever is the president. The equity market is in growing side and the investors will transform to the Treasury Bonds as when yield rate is increased to some extent even from 1.36 percent to 2.2 percent. Various instruments are available in market and the public will choose the option that will result good return on their investments. The instruments include equity, debt, certificate of deposit, bonds, mutual funds, trading on stock markets etc.
Unfortunately, many people compare only return rather than risk associated with the investment. Higher risk yields higher return and lower risk results lower return. The intelligent persons will seek advice from the financial advisers and make investments in various segments through portfolio techniques. The returns on Equity shares generally paid by way of dividends. When the companies earned profits, the corporate will pay the dividends to the equity shareholders. The face value of the equity will never change, but the share value of the stock will be fluctuating depends upon the economic and competitive environment. The interest rates will influence economic growth. The rising of interest rates negatively impact on the profits of the corporate and simultaneously stock prices will also come down. On the other hand, positive effects on profits margins and stock prices when there is decrease of interest rates. If the interest rates increased, the spending levels by the consumer negatively affected over the business markets.