How To Invest For Success Under President Trump
Success in Wall Street is measured by portfolio profits. Going by this measure, President Trump has been extremely successful in his first year of office.
President Trump was sworn into office on the 20th January 2017. Since he got into office, the stock market has continued to rise. According to Wilshire, the US stock market has gained $5.9 trillion since President Trump became president. According to The Bespoke Investment Group, the Dow Jones industrial average has reached 31.5%. This is the 3rd best rate that has ever been seen during a president’s first year. This is well above the 12.5% since 1990. 401 (k) investors have witnessed the Do grow up to approximately $13,150 after a $10,000 investment.
Tom Essaye, the founder of The Sevens Report, which usually provides key market reports at 7 a.m. before trading begins, argues that it is impossible to argue with the figures as evidenced in the President Trump stock market. This is despite what anyone thinks of President Trump.
Even though President Trump’s leadership style might put off some people, he has entrenched some pro businesses policies that have made him quite popular on Wall Street due to rising stocks and growing US economic outlook.
Bruce Bittles, the chief investment strategist at Baird, argues that the main focus should be on the results and not someone’s personality. Bruce argues that the rising stocks in his 401 (k) alone makes him highly approve of President Trump.
The presidents whose performance in their first year was similair to that of President Trump include Franklin D. Roosevelt. He was in the office when the company was recovering from the great depression. The Dow rallied 96.1% in his first year in office from March 4, 1933. When Barack Hussein Obama took office, the country was just starting to recover from the 2008 financial crisis. The Dow rallied 33.4% in his first year after he took oath on Jan. 20, 2009 primarily due to the extreme quantitive easing policy used directly under his administration.
Hornbarge and other experts on Wall Street believe that Trump should be recognized for releasing “animal spirits.” This is the term used to refer to CEOs and investors who are usually willing to take risks, so as to increase their financial empire. This shows that the “Trump Effect” has produced tangible results.
One of the major things that President Trump has done that has had a huge impact on the financial sector is the revamping of the country’s tax code. The president signed off a big tax cut that many investors deemed necessary towards increasing the competitiveness and profitability of companies in the US and the speed of economic progress. The president also reduced various regulations and bureaucracy that were interfering with how businesses were operating. According to Paul Hickey, a co-founder at Bespoke Investment Group, the tax cut spurred the market into high gear.
What is the Trump Effect and what makes the president have such a positive effect on the President Trump’s stock market?
President Trump: Business ‘Leader in Chief’
President Trump has been in the forefront of minimizing things that block businesses from being successful. President Trump has been the main cheerleader of businesses by helping to inject confidence into the business community. This is according to Essaye.
According to an outlook that was released in December by the Business Roundtable, the level of confidence that business executives have for the next 6 months is at an all-time high after six years.
President Trump Supports Business
Greg Valliere, chief global strategist, thinks that after the 2008 financial meltdown, there was tension between Washington and Businesses. However, President Trump has changed this into a more positive relationship between Washington and Business owners.
President Trump Has Shifted Market Mood
Bittle says that President Trump has been able to get things moving again by encouraging businesses, consumers and investors to get going again, so as to get the economy back up on its feet. He has played a huge psychological role in uplifting businesses and the business environment.
President Trump has inspired businesses to invest and consumers to spend, leading to some of the fastest growing stocks in recent history. This has caused businesses to make a major move and start picking up momentum. Most of the businesses have started being aggressive in the market.
Bittles highlights the fact that Wal-Mart, one of the biggest stores in America is giving its workers raises and bonuses, while Apple has huge expansion plans.
In over 17 years, consumers have high confidence levels. Business executives also have lots of positive hope for the future. A lot of employees are gaining from the corporate tax windfall, since many of them are getting bonuses and raises and businesses are being expanded.
A Washington policy analyst at New York-based investment research firm FundStrat Global Advisors, Tom Block, points out that the air has definitely changed in the business world.
Economic Outlook 2018
There is a risk of the Democrats taking over during the midterm elections that are to be held later in the year. This means that the Republicans will lose their power in Congress.
Another thing that can have a negative impact on the Trump effect are President Trump’s protectionist trade views regarding the 5 year economic forecast. This could potentially lead to problems with China when it comes to trade. This could also lead to the US withdrawing from NAFTA. This is the agreement that the U.S. has with Canada and Mexico.
At the moment, there are more positives than negatives in regards towards President Trump’s us economic outlook 2018.
Charles Gabriel, president of Capital Alpha Partners, believes that the market will continue to do well, as long as the policies President Trump puts in place helps to boost the lives of workers, increase company earnings and improve the GDP then all will be well. Gabriel believes that the Trump effect can be sustained.
Effects of President Trump’s Tweets on the Stock Market
People in the business community are now becoming more alert to the President Trump tweets, as they are now more aware of the great effects that it can have on the markets. A lot of experts in the financial world are still debating the economic impacts of these tweets.
The things that President Trump tweets about can affect any company, especially those that are publicly listed. There are companies, such as Lockheed and Boeing, which depend on US government contracts for their revenue, but generally, most companies do not depend on the government for this. These are the companies that are at high risk of being affected by the president’s tweets.
The “Trump Target Index” a Wall Street Journal study that was done to study the effect of President Trump Tweets looked into this issue. From 2016 to the first quarter of 2017, a total of 12 companies were affected by President Trump Tweets. Most of these companies had their stock prices go down immediately after a Tweet, but with time, their stock prices picked up again and became more stable.
Nevertheless, not all the stock prices were able to recover. For instance, the stock price of Toyota Motor Corporation (ADR) has undergone devaluation after the pre-inaugural tweet made by President Trump criticizing the motor company for their intentions to build a plant in Mexico to manufacture cars for the US population. President Trump was of the opinion that the company should build a plant in the US instead of in Mexico.
This saw Toyota lose $1.2 billion five minutes after the Tweet went live. It continued to lose $12 billion over the following six months.
President Trump also Tweeted about Amazon’s business practices in August 2017. This saw Amazon’s stock fall by 1% soon after the Tweet went live. Amazon closed down 0.5% for that session and they lost $5.7 billion market share.
While the long-term effects of POTUS tweets might not be that much, the short-term consequences can be risky for businesses that have short-term investments.
Top 3 Rising Stocks for 2018 Under President Trump
Finding a company whose stock will rise can be a challenging task, but it is not impossible. The key things to watch out for include company’s fundamentals, demand for products and services and checking the history of the stock price to ensure that it has been steadily rising.
You also need a general evaluation of the market. As long as the Republicans are in control of the White House and Congress, stocks might continue to rise, as a result of the low taxes and limited regulations. However, if the Fed raises interest rates on 2018, as it is expected that they will, this will impact the cost of borrowing to do business.
Here are 3 companies with the fastest growing stocks; they also have solid products and services that they offer.
Broadridge Financial Solutions, Inc.
Broadridge is one of the fastest growing stocks in the financial industry. Its main goal is to provide communication services between all the parties that are involved in a transaction. The business also makes it possible for mutual fund and equity investors to vote through a proxy on their platform. They also make it possible for traders to transfer and keep a record of stocks. The company also offers performance reporting and productivity tools. This is in addition to collecting information and portfolio management, clearing securities and doing transfers in multiple currencies.
This is one of the fastest growing stocks since November 2016 and it has found support on a regular basis during its 50-day moving average. Its stock price could rise further given its strong fundamentals and the acquisitions that the company has recently made.
The Brink’s Company
The company offers cash transportation services in armored vehicles, security systems, payment processing, guarding services at airports, and is one of the fastest growing stocks in its industry.
The company has experienced an increase in revenue over the last there quarters. This has been one of the rising stocks since December 2016 and peaked in February 2017, showing an increased demand for its services. It dipped in October 2017 and went further down in February 2018, giving a perfect opportunity for anyone who wants to buy the stock to do so now.
Amazon has expanded its retailing services to video streaming, online services and grocery outlet. Buying Whole Foods, in a bid to start its grocery outlet caused a dip in the stock price but the company recovered as this was seen as an additional opportunity to increase the revenue of the company, and is now one of the fastest growing stocks in online retail. However, President Trump’s recent criticism of this company saw its share prices fall. It is just a matter of waiting to see if the prices will go back up again.
In November 2016, a share was $240 before it dropped. However, it started going up back again and went past this figure, almost reaching the $1,000 mark severally during the last half of 2017. In October, it eventually went over the $1,000 mark. And now even after President Trump’s criticism, the stock price is at $1,572.08 a share.
President Trump Continues To Benefit America And The Economy
The various companies discussed here are taking measures, so as to diversify the industries that they are in, they kind of consumers that they have and they are also moving towards business to business marketing. If the economy continues to grow at a constant rate this year, then no doubt that these three companies will do well as they have some of the fastest growing stocks. As an investor, stay on top of trends and what is happening in the market, as you keep a keen eye on these three companies. One or all of these three companies stock could be a big winner in 2018 and beyond thanks to what President Trump has done for the economy.