Trump Will Be A Disaster For Stocks! Wait, Let Me Change My Mind

To most everyone's surprise Donald Trump won the election and will be the next president of the United States. The stock market clearly wanted Hillary Clinton to win as you can find an endless number of articles online detailing why Trump would/will be a disaster for the markets.

During the most tense hours of election night, when it was becoming clear that Trump had the upper hand and would likely win, the stock futures were down a solid 5%. That meant that the next morning every stock investor would likely wake up to a portfolio that was significantly smaller than when they went to bed.

But sometime during the rest of the night and early morning, investors started to rethink things and decided that maybe things weren't really as bad as first imagined. Maybe, just maybe, a Trump presidency might NOT be the end of the world after all.

What happened to change people's minds?

1) I think first of all, people started to remember Brexit which happened less than five months ago. While the stock market did dive deeply on that news, it only took a couple of days for things to shoot back up and normalize. Since then, the Brexit fear mongering news has completely died down and is hardly in our conscious anymore. There still might be some tough times ahead for the UK as things unwind and the fallout from the decision to break away becomes more clear but, so far at least, Brexit has clearly NOT been the disaster that so many people predicted.

2) Investors also began to realize that Trump is a businessman, is generally pro-business, and may in fact enact a lot of changes that will actually be good for business. We've tried eight years of Obama and that hasn't turned out so well economically for much of middle class America. Investors probably started to understand that this is the first time in a long while that we are going to have a President that understands business and isn't a career politician.

3) Finally, while the market is forward looking, nothing Trump does will happen right away. It will be two months before he is in office and probably months after that before any significant changes are made. If they ever are made. It is likely that Candidate Trump was more harsh in his rhetoric than his actual policies will end up being. After all, during a campaign, politicians say anything to get elected but once in office they calm down and rarely follow through on their most divisive plans. This will probably be the case with President Trump as well.

The stock market is a crazy place where emotions can get the best of you very quickly. Its best to never trade on fear or panic and this time it seems investors got their emotions from election night under control the next day. That was a disappointment for me because I was hoping to do some buying on the morning of November 9th but stocks never went on sale like I hoped they would.

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