Don’t mix investing with politics

November 22, 2016

As of today’s closing, all the U.S. stock market major indices reached record highs.  The Dow closed above the resistance level of 19,000.  In the short run, the stock market will not have a “stairway to heaven” type of climb. I guarantee there will be dips at the slightest whiff of any bad news. Remember the first quarter of this year when the price of crude dipped below $35 per barrel? Moreover, there will be profit taking by the Gnomes of Wall Street.

The new resistance level we are looking for on the Dow is 19,500.  There may be a 10% correction before reaching this resistance level.  The climate has suddenly changed with the election of Trump.  The Gnomes of Wall Street, or perhaps we should call them the shepherds leading the flock suddenly decided that a Trump presidency is good for the economy.  Does anyone even remember that the Dow futures were 800 points down on election night as Trump started winning the battleground states one by one?  What was that all about?  Even though the market opened higher on the day after Election Day, my friend Jake got out of the market as soon as it opened at 9:30, Wednesday morning and put his entire portfolio into a money market fund. He voted for Hillary and was afraid that Trump’s victory would precipitate a global equity sell-off because he believed that Trump is an unpredictable, unstable and unqualified leader who’s the laughing stock of the whole world.  Even after the Dow gained 1,000 points, my friend Jake is still out of the stock market.  He told me last night he “cannot believe why the market keeps going up”. Don’t mix investing with politics, folks. Happy thanksgiving!!

Leave a Reply

Your email address will not be published. Required fields are marked *