TRUMP VICTORY – DON’T PANIC
Global economic mayhem? Political mayhem? What drivel.
As originally appeared in the Jerusalem Post on November 10, 2016
Leading up to the US presidential election I was asked on numerous occasions if I thought that a Trump victory would send the stock market crashing. Every single person that asked me said that they either read or heard that it would be a “sure thing” that a crash would take place. I responded to each one very simply by asking “why”? Why should a potential Trump victory spell doom for the markets? No one was able to provide me with a reasonable answer.
As election results started pouring in an article ran in Fortune online “Investors should brace for a further slump in global stock markets, the US dollar and most commodities if Republican candidate Donald Trump becomes the next US president. Markets fear a Trump victory could trigger global economic and political mayhem, creating massive uncertainty for investors who had been counting on a win by Democrat Hillary Clinton, whose policies were seen as more staid but predictable.”
Global economic mayhem? Political mayhem? What drivel.
At the same point in time that the Fortune article ran and it became clearer that he would win the stock futures were showing steep losses. Then as we got closer and closer to the opening bell of the market the losses tapered off, and the market recovered. Now I am not saying that the market may night drop on the heels of the results but a crash? After all his economic policy of cutting taxes, lifting onerous regulation, repealing and changing Obamacare are all hugely beneficial for the economy. An economy that can finally catch fire and escape the sluggish growth that has plagued the world for the last eight years should be a positive for stocks. Not lead to a meltdown. Now that all the campaigning is finally over and Trump pulled off the win, the question for investors is what to do?
Goals
Just like had Hillary won, certain sectors would have benefited more than others. The Trump win seemingly would be a boost for biotechnology, oil and gas as well as the coal industry. Obviously I am not recommending that you go out and by those investments. Research must always be done before purchasing an investment to see if it matches both your risk profile as well as helps you to achieve your goals. My point is that there will be opportunities to profit in the market. But to panic and sell is a fool’s game, and is a surefire way to miss out on growing wealth when the market finally does make a big move higher.
I know that I sound like a broken record but the way to grow wealth is to buy good investments and hold them. If the market were to drop, buying more has been proven over and over to be very profitable. If short-term market movements make you nervous, you either have no business investing in the stock market to begin with or at the very least it’s a sign that you must dial back your exposure to stocks.
As Warren Buffet said, “I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”
Individuals need to stop relying on the government no matter who the president is, to provide for a secure financial future. Do it yourself. Start saving, living within your means and investing and if you do there is a great chance that you will succeed financially.
As I have written here previously, Investors need to remember that there are no shortcuts when it comes to investing. There is virtually no way to get rich quick in investing. Over the long-term the results of the election are not so relevant vis-à-vis the stock market. By staying focused and disciplined with your investment portfolio you have the potential to build wealth for the long term.
The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates. Aaron Katsman is author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing(McGraw-Hill), and is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, FSI. For more information, call (02) 624-0995 visit www.gpsinvestor.com or email aaron@lighthousecapital.co.il.
