Fidelity: Market fluctuations caused by the US election bring opportunities for contrarian investors to buy low.

In his article published by Fidelity International, Dan Roberts stated that as the market digests the results of the US election, his investment team is closely monitoring the policy shifts of the new administration to assess how these new policies may affect both US and non-US companies in the coming months. Dan Roberts mentioned that their investment strategy focuses on long-term investments with low turnover, so it is unlikely that the US election will trigger major changes in their allocations. However, market volatility caused by hot topics like the US election may actually provide opportunities for investors who do not follow the crowd to buy low. Dan Roberts also stated that their strategy remains unchanged, focusing on selecting high-quality, cash-generating, resilient businesses with competitive advantages and growth primarily driven by internal factors. Their investment rationale does not rely on whether a certain political or macroeconomic situation will materialize, but rather on investing in companies that they believe are worth investing in under different government regimes and economic cycles. Looking at the historical trends, Dan Roberts found that there is no clear relationship between the composition of the US government and the subsequent returns of the US stock market. Regardless of whether a Republican or Democratic candidate wins the presidency, or whether one party wins in a landslide or the government is divided, the US market's performance in the four years after the election is roughly the same. Following the election results, cyclical stocks and companies expected to benefit from deregulation (such as banks) in the US experienced an immediate rise, while defensive stocks and non-US stocks fell out of favor. However, the market will continue to digest the election results in the coming days, and as the actual policies are gradually announced in the midterm, the market will respond accordingly. From a policy perspective, both parties during the election campaign promised to increase spending, but the economic policies proposed lack details. Stock investors will closely watch the new government's stance on taxation and tariffs. The US stock market trades at a significant premium compared to other global stock markets, with valuation gaps being extreme in the past few decades. The high valuations of US stocks are partly due to the dominance of technology stocks, but upon deeper analysis, it is found that US stocks generally have a premium valuation, with 9 out of 10 industries having higher valuations compared to their non-US counterparts. Based on their valuation discipline, Dan Roberts often finds better opportunities in non-US registered companies. However, many European and Asian companies they favor actually derive a significant portion of their revenue from the US. Additionally, many large US technology companies either do not pay dividends or pay very little dividends, making them unsuitable for their strategy.