Now that the Presidential election is in the history books, we have received a few inquiries from people wanting to know if this would be a good time to invest. Over the two and half weeks leading up to the election, the stock market sold off for nine consecutive days (the longest such streak in over 30 years) and then reversed course during the final two days prior to Tuesday’s election. Markets do not like uncertainty and with a consensus opinion that Hillary Clinton would become the 45th President of the United States things normalized. Just like many people, markets typically prefer the known over the unknown.
In the wake of the unprecedented election of Donald Trump, overseas markets immediately sold off and our domestic markets were down big in pre-market trading. As is often the case, the consensus opinion was wrong, the sky didn’t fall and broad U.S. markets closed November 9th up for the day. Just when most experts thought we would see a drop of 500 points in the Dow Jones Industrial Average, it closed in near record high territory. So much for conventional wisdom.
Back to the question being asked – “Is this a good time to invest?”. Not to sound glib, but whenever you have money available to fund your goals it is a good time to invest, as opposed to doing nothing. The more pertinent issue is determining how you should prudently invest it. That’s not what those asking the question want to know. They are seeking a prediction for the short-term direction of the stock market given the election results. Our answer to that question is the same today as it was yesterday, last month and last year and it will be the same tomorrow, next month and next year - we have no clue. Nor does anyone else. We can make a strong case that the pro-growth policies suggested by a Trump administration are quite promising for stocks, but we may be wrong. Those polices may not be implemented or other countering forces may intervene. Events that influence the immediate direction of markets are inherently unpredictable as many investors continue to learn the hard way.
King Solomon said, “He who observes the wind will not sow, and he who regards the clouds will not reap.” Successful investing does not depend on correctly guessing the next movement in stocks, interest rates, oil prices, gold, the weather or even a presidential election. It is dependent upon having a prudently designed plan that reduces your goals and objectives to writing, identifies the resources needed to fund those goals and a low-cost, tax-efficient, risk-appropriate investment strategy. Anything less is pure speculation and that is not the business of the professionals at Wealthview Capital. With the election now over, let’s get on with the business of reuniting our nation, looking for ways to make the world a better place for all and becoming a more faithful steward of the assets entrusted to us.