Make no mistake about it folks, Donald Trump will make investors rich! Since his election victory last month, Donald Trump is unsettling virtually everything. From shaking up foreign relations to threatening to tear up trade deals, to promising to restore the economy. It appears that Trump is creating all kinds of chaos which I’m sure will greatly benefit the intelligent investor.
Markets are driven by emotion more than anything else and they seem to be hanging on every statement that Mr. Trump makes. Trump promises to lower drug costs and the pharma sector falls. He threatens to cancel the contract for a replacement Air Force One and Boeing’s (BA) stock drops a bit. He offers vague promises of economic growth and the market rises. First, I want to be clear that I don’t believe that Donald Trump is some kind of Market Messiah; but his personality and temperament will undoubtedly make investors lots of money if we choose to seize the opportunity.
I for one cannot believe what’s happening in the market. In fact, correct me if I’m wrong but I think the market euphoria we’re seeing feels like the late 90s. This situation seems completely insane!
Personally, I feel that Trump’s dramatic statements and theatrics are better left to the Apprentice because, in the real world, things rarely work out exactly as planned, especially when we’re dealing with things as complex as running the US Government, international relations and the global economy.
But to my mind, there’s no question that Trump’s off the cuff remarks give investors an incredible opportunity to make money. So please take advantage of him while he lasts. Because markets are primarily psychology driven there’s lots to work with when it comes to a Trump presidency.
I think it’s unlikely that any of Trump’s policies will make investors rich in and of themselves. But I do think that Trump will offers us tons of money-making opportunities based on his ability to influence market sentiment. In that regard it may be extremely profitable to be a contrarian and buy the high quality blue-chip stocks that have been hit hard. I’m thinking about the pharma, consumer staples and utility sectors. Stocks like JNJ, PG, UL etc.
Major historical, economic and market forces are rarely influenced by any one person – and that includes presidents of the United States. Everyone knows that the grandest of plans fall victim to all sorts of unforeseen events and unintended consequences and that success is often as much attributed to circumstance and luck than anything else.
So I think as investors, we need to be asking ourselves what has actually changed since Trump won the presidential race? In the developed world, we still have an ageing population which doesn’t bode well for growth. The EU seems to be falling apart, China still has its problems, the Russians are becoming more and more belligerent, global growth is anemic and the entire world is sitting on piles and piles of debt.
Tell me what you think. Do you think that Trump will be good for investors?
Photo By Michael Vadon (Donald Trump) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons