johnst1001a wrote:
The stock market went from 10,700 to just under 7000 during the Bush years and Republican control of the house and senate. During the Obama years, the market went from 7000 to about 18,000. During the Clinton years, the market went from the mid 3000's to 10,700. So far for Trump, the market has gone from 18000's to 25,000+. So, it would seem to me it is hard to pin market direction on who is in the White House. Yes, if the market is juiced up with tax incentives or with stimulus packages, the market will move up, but then over time, the market goes back to where earnings drive the value of the market.
Would I be cautious during the election period this year, yes, I would. I am going to start selling some of my stocks that have seen more gain than I think is warranted just for their earnings growth. For instance, I will be selling Amazon, Netflix. Amazon is up 145% since I bought it, and the company has a very high P/E ratio. Netflix, I am up about 70%, but with the subscriber numbers slowing down, I believe this stock is getting more risky. What is more likely to cause the market downturn is any significant inflation caused by the tariff program, or simply a very high GDP growth, resulting in the Fed raising interest rates to slow it down a bit so as to reduce inflation rates. Shifting to bonds is what many people do or simply CD's to take advantage of the higher interest rates.
People do get greedy, I am a victim of greed too, so we tend to hold on to stocks at high levels, then when the market starts to swing down, we sell way to late, and lose a lot of what we have gained.
Ok, there are three potential things that will happen in the future, the market will either go up, stay the same, or go down. Very few people have ever predicted the market accurately. Those with a ton of money in the market have ways of protecting their risks with hedging, but I am not smart enough to do this.
Interestingly with all the buzz that Democrats are going to have the majority in the House, has not moved the markets. I would have thougth if this was going to be a factor, some movement would already have happened.
The stock market went from 10,700 to just under 70... (
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