I begun writing this piece the morning after the US election with a message to keep calm, take a long-term view, and consider some of the positives – from an economic standpoint at least – that a Trump presidency could possibly bring. By the end of the day, however, it seemed the epistle was already redundant, as several markets around the world closed higher – including the US.

This isn’t the first unexpected voter choice we’ve had this year and it may not be the last. The Italian referendum on 4 December, although at first glance not quite as significant a contender on the global stage, has ramifications for the future of the eurozone.

Maybe we’re all just getting a bit blasé about these kinds of political ‘shocks’? Every time, we’re forewarned of dire consequences and, thus far at least, markets continue to rebound.

So now I’m minded to simply encourage investors to think about balance. Wild emotions at either extreme are the enemy of good investing decisions, and campaigns for both the UK/EU referendum and the US election have been highly sentiment-driven.

Political risk in the US has definitely increased. Commitments to revive manufacturing economies in the US and protect American firms are worrying for many international trading partners. Trump’s foreign policy intentions are also pretty opaque.

However on the other hand, the US market has some of the best quality companies in the world and these won’t suddenly fail overnight. Trump’s lack of political expertise may be tempered somewhat by his business experience. He wants to cut corporate taxes and significantly expand infrastructure, both of which could be a boon for the US economy. Which, by the way, is not doing too badly. Consumption has been good, the labour market is strong and the housing market recovery continues.

US Federal Reserve now in focus

Many fund managers have turned their attention to the next big event on the horizon – the US Federal Reserve (the Fed) meeting in December. When the odds were backing a Clinton win, the likelihood of an interest rate rise next month was high. Now, opinion is divided.

The fact that four members of the Fed’s committee are due to be replaced in December is adding to uncertainty, and Trump has made no secret that he dislikes the current chair, Janet Yellen. We may see something of a shake-up. Given the flow-on effects of US interest rate decisions around the world, this is definitely an area for investors to watch.

Meanwhile, 10-year US government bond yields have shot up in the aftermath (meaning the bonds have become less valuable). This is partly because of the expectation that Trump will undertake a massive infrastructure programme, as I mentioned above. Most people’s best guess is that he will have to fund this through debt, meaning a whole lot of new government bonds may soon flood the market. For investors already holding US government bonds as safe haven assets, this may not be such good news.

The health of the S&P 500

My main hesitation with US equities remain the same as it was before the election – they are expensive. The S&P 500 (America’s main stock market index) is at all-time highs and price-to-earnings (P/E) ratios are above long-term averages, despite the fact that corporate earnings have actually been falling. While the market seems to have weathered the Trump storm well so far, buying equities at these valuations does expose you to extra risk.

It’s not a reason to avoid the market altogether, but it is, in my opinion, a reason to avoid a tracker fund or, perhaps, some of the larger, better-known stocks. There may be a big difference between the winners and the losers in the next few months (or longer), and careful stock picking is the way to go. In this context, a couple of funds I like at the moment are Hermes US SMID Equity and Schroder US Mid Cap, both of which focus on smaller and/or medium-sized companies.

This area of the market may be more volatile than the larger end of town, but the potential for growth is greater too. An active fund such as these two also means managers can decide to eschew or invest more heavily into certain sectors, depending on how they believe a Trump presidency may play out.

For example, defence is another area where the Donald has indicated government spending may increase. Meanwhile, clean energy is not a concept Trump seems to support and his policy decisions may be unlikely to support those kinds of companies.

For the more cautious investor at this stage, who is not indeed sure what Trump will make of America, a global fund may be another option. This way, you could gain some exposure to US equities in the case they take off; however, the diversification might help if other markets do perform better. M&G Global Dividend fits the bill and its income focus also makes it stand out from some of its other sector peers.

Darius McDermott is managing director of Chelsea Financial Services