The stock market is on an epic post-election sugar high. The “Trump Bump” (i.e. the Trump-related stock market bounce, not the president’s favorite playlist while he’s signing executive orders) has boosted the S&P and Dow numbers to unexpected highs. So what’s going on, you ask? Well thanks to President Trump’s promises of tax cuts, deregulation, infrastructure investment and pro-American business policies, Wall Street has made the assumption that he’ll be good for the economy, hence the stock pockets of the 1% just got (a lot) deeper. But as much as President Trump would like to (and does) claim all the credit for the market rally, it seems that a nurtured economy, high corporate earnings, rebounding oil prices, low unemployment, and eight years of near-zero interest rates deserve some recognition too. But who has time to look backward? After all, time is money.
So is it too good to be true, you ask? Well if you have to ask that, almost certainly yes. But in this case… almost certainly yes. President Trump does seem to wield more power over the markets with single tweets and half sentences (think: Lockheed Martin, Boeing, Ford and GM) than any other individual, except perhaps Warren Buffet. Investors are still trying to figure out what to make of his tweets, but one thing they all agree on is that while Trump's unpredictability may equal more rewards, it also equals much more risk. Sure the president has economic plans, lots of plans, the Best Plans, buuut he’s still pretty light on the details. And until all of his talk translates into action, the market will remain as volatile as the man himself.
So should I invest now, you ask? Well, firstly you shouldn’t ask random people on the internet for financial advice. And secondly, gravity. Sure the market has had a period of prolonged (albeit slow) growth and has been very resilient in the face of Brexit, natural disasters, terrorist attacks and the polarizing US election. But what goes up must come down – it’s just a matter of timing. And though Trump's influence on the markets is astonishing (and for now, positive) there’s one glaring flaw in its design: it hasn't yet proven that it’s sustainable. So go ahead, ride the rally…if you dare.
Feel that greed is good? Better have that killer instinct, Bud. Movie for your mood: Wall Street