I’m asking this question without any political agenda, just trying to figure out what the market environment might look like over the next four years.
I’ve been looking at the history of the US stock market over the past century, but I’m not too familiar with how market cycles have overlapped with different presidencies or how government policies have impacted markets in the past. I get that market returns don’t always match whether a Republican or Democratic president is in office, and that the majority party in the House has a big influence on market performance.
But even with the lack of strong correlation in the past, is there a general consensus that the incoming administration will be the most business-friendly in modern history, and therefore the most market-friendly too?
When major companies like Walmart, Exxon, AutoZone, and others come out and say, ‘What you’re doing is not a good idea,’ you know there might be some problems with the plan.
I’ll let others who know more about the market give their opinions, but I’m planning to adjust my portfolio to be more conservative. In my opinion, tariffs and mass deportation could push up inflation, raise consumer costs, and lead to a lot of market volatility that I’m not experienced enough to deal with. Honestly, I think this is the most incompetent administration in recent history, but I hope I’m wrong about that.
@Harlem
What’s the best way to hedge against the possible economic issues with this administration? Like what are you shifting your investments into right now?
Vitt said: @Harlem
What’s the best way to hedge against the possible economic issues with this administration? Like what are you shifting your investments into right now?
@Harlem
I agree with everything you said, but history shows that it’s usually better to stick through the volatility rather than pull out and try to time it. As long as you don’t panic sell during a downturn.
Although, my investing career is still pretty young, so maybe I don’t know what I’m talking about haha
This has come up before, but here’s my take based on what I’ve read recently.
The current administration seems to be putting people in charge who may end up dismantling or disrupting some of the most effective US organizations. Once those are gone, I think they’ll outsource tasks to private companies like what’s happened with prisons.
The few companies that win from this will make huge profits, and the deregulation will only help them. The rest of us? Well, we’ll probably be left to deal with the fallout.
@Arun
It’s a scary thought. But I don’t see how they’ll be able to throw out hundreds of thousands of government employees and still keep the economy running. We’ll see.
Jade said: @Arun
It’s a scary thought. But I don’t see how they’ll be able to throw out hundreds of thousands of government employees and still keep the economy running. We’ll see.
You’re assuming they care about keeping the economy stable.
They thrive on chaos, and we’ve seen how it worked in other countries. It might work here too.
Gold, bonds, dividend stocks for the portfolio, and maybe some options for trading. The market is going to be very volatile since trust in the government is low, and inflation will keep pushing prices up.
It’s a tough time, but it’s also a good chance for option traders to make money on both sides.
This usually leads to a market crash in the end, but it could take 3-4 years to reach that point.
Lower corporate taxes and fewer regulations would likely be good for the stock market. But tariffs could hurt a lot. I think right now, the market expects the new administration to ease up on the extreme tariffs they campaigned on, maybe just going for some symbolic ones. But things can change fast.
Strictly from an investing standpoint, my advice is to stay the course and keep investing according to your age and risk level. Nobody knows what will really happen.
Lowering taxes and cutting government spending and regulation is definitely market-friendly. But tariffs will likely push inflation higher. A costly deportation plan and the loss of cheap labor could hurt the economy too. So, you really have to balance all these factors in your mind.
You’re probably going to hear a lot of doom and gloom here, because most users on Reddit are left-leaning. If you only used Reddit for your research, you’d think Trump was going to get 5% of the vote and end up in prison right after. The bias is real, but now it’s shifting to a doom-and-gloom narrative that Trump will destroy the country. But that’s not true. As you pointed out, Trump is very business-friendly, and he’ll focus on improving the business climate. Of course, he won’t keep all his promises, but the market will be fine.
Don’t pay too much attention to the doom-and-gloom stories here. We saw how things went last time he was in office. The market will be fine. Just stick with a buy and hold strategy, and ignore the media hysteria. That’s the best way to go.