The election was a mere 4 months ago but it seems like so much has happened since then. I remember watching the election results come in and the futures market began to tumble (almost 5%). It was a major news story for a couple hours on election night before it sharply rebounded. The following day a story was released regarding the billionaire investor Carl Icahn. Icahn, a personal friend of Donald Trump, was an early supporter. He was naturally with the Trump family on election night. However, when he saw the futures market tumbling, Icahn left the celebrations to go invest approximately $1 billion. In fact, he claimed that he wanted to invest more but that was all he had available. Subsequently, the Dow has rallied approximately 13% since then. What did Icahn know that everyone else didn’t? What was his “trump card.”
Carl Icahn understood 1 basic principle when it comes to investing. When emotions are allowed to guide investment decisions, you will see wild swings in the market. Those wild swings distort the true value of companies (both to the upside and the downside). That distortion creates great opportunity for those who recognize it.
Recognizing The Trump Card
On election night, and for the weeks prior, there were countless stories stating that if Donald Trump was to win the stock market would crash. That information was based on the uncertainty of what Donald Trump would say and/or tweet. They were partially correct as the market has tended to swing after his comments. However, those swings have also tended to be short lived once the reality of his actions sets in. This has shown to be the greatest “Trump Card” for investors. While Donald Trump’s Presidency is relatively young, there are 3 actions that require our attention.
The first relates to the U.S energy production. Donald Trump has removed a variety of regulations and approved projects that will lead to the United States becoming more energy independent. The United States energy market is in the middle of a renaissance of sorts. We have shifted from a country that is lacking energy to one that may be the largest global producer in the not to distant future. Next, is that Donald Trump is first and foremost a builder. He is currently taking bids to start a variety of projects, including the wall on our southern border. Therefore, any company that has a direct or indirect link to large scale building projects will likely profit from Trump’s policies. Finally, and perhaps the most surprising to most, are global and/or international companies. Donald Trump has been regularly meeting with a variety of leaders from around the world. Those leaders have been, and continue to be negotiating with Trump. Those leaders respective countries, and in turn companies, will benefit. International markets have already begun to react positively.
Whether you’re the most ardent Trump supporter or detractor, it is imperative that we focus on what is actually occurring rather than how we may feel about those policies. I am here to assist you in pursuing your financial goals, and recognizing opportunities is essential to your success. Hopefully, the information I provide will end up being your personal “trump card.”
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
