What affect will the Trump presidency have on the market, Sacramento investors, and on my portfolio?
My answer is as follows: I don’t know. And my second answer is this: it does not matter. You will hear many so called experts in the media in the coming weeks attempt to answer this question. They don’t know either. Dow futures dropped about 900 points in the wee hours of Wednesday morning just after Trump’s victory only to open flat by 6:30 AM PST. In the subsequent two days, the Dow has rallied another approximate 475 points (as of the close on 11/10/16) thus marking an approximate 1,375 point (almost 8%) swing from low to high. No one predicted this. How would you like to have been the genius sophisticated institutional trader who sold the Dow at 4:00 AM on Wednesday when it was down 900 points? Attempting to react or trade news around Trump’s presidency is not doable or worth trying. Bottom line: this is not a good question because no one can reliably answer it.
In light of the Trump victory, what in the heck am I supposed to do now? Now that is a good question and one we CAN answer:
- As the Eagles said in song, “Take it easy”. For right now, there is no reason to make any big changes to your investments. Over the next few weeks you will continue to hear a whole bunch of hype in the news media about the coming Trump presidency most of which is designed to get you to pay attention for a short while on the possibility you will also watch an advertisement. Certainly keep informed but there is no reason to buy into any of the drama that is being hocked. As the Black Eyed Peas said is song, “We don’t need no drama”.
- Call Jeff Adams so we can review your portfolio and financial plan (916-333-5989). Let us make sure your investments are suitable to your goals, life circumstances, risk tolerance and are well diversified.
This IS always a good idea no matter what is going on in the market or the news.
- Stay focused on the things you CAN predict and control like…. how much you are putting into retirement, how you are managing your household expenses and budget, and how you are using debt.
- Be nice to your friends and family on the other side of the political debate. Now look, Thanksgiving is coming up and there is no reason to get into some heated political discussion. Let’s just be thankful for all the many blessing we have. I personally just change the subject when a political matzo ball is thrown out by a relative during Thanksgiving: I ask, “You look marvelous … what do you do to keep looking so young!”.
By remaining calm and staying focused on the things we can control, we will all do much better with our investments and life.