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U.S. stocks rallied to new highs on Wednesday after voters returned Donald Trump to the White House.Michael M. Santiago/Getty Images

The uncertainty is over. Bring on more uncertainty.

The U.S. election on Tuesday was the most anticipated event of the year, in financial markets and far beyond, and when the result became clear much earlier than pollsters had predicted, markets cheered.

On Wednesday, the Dow Jones Industrial Average saw its biggest gain in two years, and the S&P 500 rallied 2.5 per cent. Both indexes hit record highs. Even the S&P/TSX Composite Index responded positively, gaining 1.1 per cent. It’s an especially good time for investors in Tesla Inc. and Bitcoin.

But the clarity – and market euphoria – might be short-lived.

David Rosenberg, founder of Rosenberg Research, wrote in the Globe that markets are making the mistake of assuming a repeat of the 2016-2018 period after Donald Trump was first elected. For starters, he writes, “equity market positioning, sentiment and valuations at the time were light years away from where they are currently.”

While stocks soared on Wednesday, so did yields on 10-year U.S. Treasuries, hitting a five-month high of almost 4.5 per cent as some investors worried about the effects of tariffs and higher deficits under President-elect Trump.

And while the U.S. Federal Reserve Board went ahead with an anticipated 25-basis-point cut on Thursday, its path is far less certain as it prepares for another Trump term that could bring a return of inflation as well as turmoil and name-calling with the central bank’s leadership.

Canada, meanwhile, is bracing for tariffs and a renegotiation of North America’s free-trade agreement. Companies “have to be ready for chaos and the unpredictable,” Jesse Goldman, a partner at law firm Osler, Hoskin & Harcourt LLP, told the Globe’s Mark Rendell and Jason Kirby.

Former senior Trump aides and leading Democrats spent the final weeks of the election campaign characterizing Trump as a fascist. But as David Brooks at the New York Times and others have argued, that characterization misses the defining feature of the former and returning president’s governing style: chaos. For investors, that means – at the very least – a return to the days of being on guard for sometimes incomprehensible Tweets (remember “covfefe”) that can move markets.

For advisors, the correct response in most cases will be to do nothing. Client portfolios are designed to weather various environments, and who controls the White House usually has little effect on stock markets.

But the election outcome may create anxiety for some clients who will need reassurance about the state of their portfolios, the economy and possibly the world. Be prepared with answers for at least two of those.

The outcome also provides a picture of the broader anxiety that advisors have surely witnessed. It can be seen in the surveys doing the rounds almost weekly showing low financial confidence and resilience. In a year of elections around the world, incumbents keep tumbling. The most compelling explanation of Tuesday’s outcome may be that U.S. voters asked themselves if they’re better off than they were four years ago and answered “No.” That’s despite a historically strong job market, solid economic growth and falling inflation – and so-called “elites” telling Americans about those positive indicators.

For advisors, that means clients may not be feeling as secure as they should be. It also means the messages to reassure them need to be more tailored, personal and compelling. While it may not be time to change investment strategies, a more general check-in with clients to reassure them and remind them of their financial plan is a good way to provide value.

What are you telling clients? Let me know: mburgess@globeandmail.com.

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