"Trump Rally" with any basis or doomed to come down to earth soon?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Locked
Topic Author
abjo
Posts: 45
Joined: Mon Feb 16, 2015 10:24 am

"Trump Rally" with any basis or doomed to come down to earth soon?

Post by abjo »

Is there any significant basis to the stock market rally that we are observing in the past few weeks? Are there fundamentals to support it? I do not believe in market timing or stock selection so am happily invested in broad index funds so I am indifferent to rally or downturns in the markets. However, i am curious as to what is driving this rally and if this is going to come down crashing sometime soon.
User avatar
Taylor Larimore
Advisory Board
Posts: 30039
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

"I Don't Know. I Don't Care."

Post by Taylor Larimore »

abjo wrote:I am curious as to what is driving this rally and if this is going to come down crashing sometime soon.
abjo:

I Don't Know. I Don't Care.

Happy Holiday!
Taylor
Last edited by Taylor Larimore on Tue Dec 20, 2016 1:07 pm, edited 1 time in total.
"Simplicity is the master key to financial success." -- Jack Bogle
User avatar
FiveK
Posts: 10561
Joined: Sun Mar 16, 2014 2:43 pm

Re: "Trump Rally" with any basis or doomed to come down to earth soon?

Post by FiveK »

One perception is that Trump will promote more business-friendly policies.

He might or might not.

As a consequence to whatever Trump does, and in response to things outside of Trump's control, the market will rise and fall in the days and years to come. The amounts and times of those rises and falls, however, ...?
User avatar
cheese_breath
Posts: 9942
Joined: Wed Sep 14, 2011 7:08 pm

Re: "Trump Rally" with any basis or doomed to come down to earth soon?

Post by cheese_breath »

What's driving it is speculation :shock: . People are guessing a Trump presidency will be good for business and thereby good for the market, and they want in before it happens.
The surest way to know the future is when it becomes the past.
User avatar
William4u
Posts: 1401
Joined: Fri Jun 01, 2012 3:02 pm

Re: "Trump Rally" with any basis or doomed to come down to earth soon?

Post by William4u »

In before the lock! :wink:

Long term I think it will hurt the stock market by poor administration of government. Short term it will be a give-away to the rich, which might or might not help stocks.

I'm still long on stocks because I think our republic can handle even very incompetent administration (although this will be a unique first test in that regard).
User avatar
cheese_breath
Posts: 9942
Joined: Wed Sep 14, 2011 7:08 pm

Re: "Trump Rally" with any basis or doomed to come down to earth soon?

Post by cheese_breath »

William4u wrote:In before the lock! :wink:
.....
I'm still long on stocks because I think our republic can handle even very incompetent administration (although this will be a unique first test in that regard).
That comment will get it locked for sure.
The surest way to know the future is when it becomes the past.
minesweep
Posts: 1341
Joined: Fri Mar 02, 2007 9:17 pm

Re: "Trump Rally" with any basis or doomed to come down to earth soon?

Post by minesweep »

cheese_breath wrote:
William4u wrote:In before the lock! :wink:
.....
I'm still long on stocks because I think our republic can handle even very incompetent administration (although this will be a unique first test in that regard).
That comment will get it locked for sure.
Or, the Wiiliam4u comment will be deleted and the topic will live to see another day (or whatever time frame that would be).
Time is your friend; impulse is your enemy - John Bogle | Learn every day, but especially from the experiences of others, it's cheaper! - John Bogle
MathWizard
Posts: 4406
Joined: Tue Jul 26, 2011 1:35 pm

Re: "Trump Rally" with any basis or doomed to come down to earth soon?

Post by MathWizard »

I see no fundamentals to support the current rise in the DJIA.

You are speculating by saying it is a "Trump Rally".
It may be a "Thank god the election is over rally"
It may be "The holidays are here, lets buy stocks rally"
It could be "The Fed raised rates and the sky did not fall rally"

Who knows.

If you look at the P/E ratio of the DJIA, it is now over 21.
That looks high, historically. So investors are probably paying too much for equities.
However, I'm still buying according to my AA.
orca91
Posts: 1223
Joined: Thu Mar 03, 2016 7:17 pm

Re: "Trump Rally" with any basis or doomed to come down to earth soon?

Post by orca91 »

Trump..... I thought this was the Christmas rally?! :happy

OP, don't worry about what it is. You said you're indifferent to rally and crash times. Whatever this is, if it's even a rally, will be but a blip on the line 20 years from now.
Spirit Rider
Posts: 13644
Joined: Fri Mar 02, 2007 2:39 pm

Re: "Trump Rally" with any basis or doomed to come down to earth soon?

Post by Spirit Rider »

minesweep wrote:
cheese_breath wrote:
William4u wrote:In before the lock! :wink:
.....
I'm still long on stocks because I think our republic can handle even very incompetent administration (although this will be a unique first test in that regard).
That comment will get it locked for sure.
Or, the Wiiliam4u comment will be deleted and the topic will live to see another day (or whatever time frame that would be).
^^^ I think it should be this. The OP is actionable or at least the advice is probably to stay the course. At its core this post is not any different than concern over any other macro influencer to the markets. It is the political motivated post and not the thread at fault here.
adamthesmythe
Posts: 3850
Joined: Mon Sep 22, 2014 4:47 pm

Re: "Trump Rally" with any basis or doomed to come down to earth soon?

Post by adamthesmythe »

We have been in a slow economic recovery for some time. The incoming administration appears to not believe this and appears to plan stimulus of some sort. My personal guess- and just a guess- is that we will see accelerated growth likely followed by a recession sooner than would have occurred had (the government) stayed the course.

I have no problem with using this as an opportunity to move some money into intermediate term bonds, which I should have done anyway, as I have recently retired.
robertalpert
Posts: 455
Joined: Wed Aug 22, 2007 10:09 pm

Re: "Trump Rally" with any basis or doomed to come down to earth soon?

Post by robertalpert »

Slow growth is boring and effective. That is how it should be. That's how it's been for past 8 years.

He will most certainly stimulate the economy till over-stimulated; then the crash. Keeping close eye on yield curve. Rebalance (or perhaps market-timing) opportunity on the horizon.

Got in before the lock :beer
User avatar
bottlecap
Posts: 6562
Joined: Tue Mar 06, 2007 11:21 pm
Location: Tennessee

Re: "Trump Rally" with any basis or doomed to come down to earth soon?

Post by bottlecap »

Politics aside, this is a market timing question. Why would you post a market timing question in this forum?

Post it on a market timing forum and carefully read the responses you get. You'll find that everyone cares and nobody knows. Here nobody knows and most of us don't care.

JT
User avatar
jmndu99
Posts: 341
Joined: Sun Jul 14, 2013 4:18 pm

Re: "Trump Rally" with any basis or doomed to come down to earth soon?

Post by jmndu99 »

Good afternoon,
The Market likes certainty.

2 questions that the Market had have been answered. Who will be president and what will the Federal Reserve interest rate hike be.
wolf359
Posts: 2212
Joined: Sun Mar 15, 2015 8:47 am

Re: "Trump Rally" with any basis or doomed to come down to earth soon?

Post by wolf359 »

It was very entertaining watching Jim Cramer on CNBC this morning. (Actually, it's usually entertaining to watch Jim Cramer.)

He was pointing out all sorts of negative events that should have stopped the market in its tracks. Turmoil in the Middle East. Russian Ambassador gets assassinated. Fed raises interest rates. Fed states that they're going to raise rates multiple times more in the next year, right after they raised rates (proving that they're doing it.) Russians implicated in trying to sway the election. All of these things happening simultaneously in the last two weeks. Who cares? Market's going up.

Why? He was flabbergasted. He was reading new projections that the market will climb further. All the reasons cited were already known. The only change was a change in attitude. Basically, the market is going up because it's going up. Everyone is looking ahead to 2018, but discounting bad earnings forecasts for 2017.

He believes the market will have to come down to Earth, but has no idea how or when. It was very funny to see him just stammering, "What is happening?!?"

Cheap entertainment. The actionable item is when do you rebalance? I'm getting near my rebalancing time, but I might do it a little early this year.
User avatar
telemark
Posts: 2766
Joined: Sat Aug 11, 2012 6:35 am

Re: "Trump Rally" with any basis or doomed to come down to earth soon?

Post by telemark »

Nothing fundamental has changed, so at this point it's all about expectations, and expectations can change very quickly. I expect the market to fluctuate.
User avatar
prudent
Moderator
Posts: 7701
Joined: Fri May 20, 2011 2:50 pm

Re: "Trump Rally" with any basis or doomed to come down to earth soon?

Post by prudent »

Topic is locked (political discussion, speculation on future legislation). Note that forum policy states:
In order to avoid the inevitable frictions that arise from these topics, political or religious posts and comments are prohibited. The only exceptions to this rule are:
◾Common religious expressions such as sending your prayers to an ailing member.
◾Usage of factual and non-derogatory political labels when necessary to the discussion at hand.
◾Discussions about enacted laws or regulations that affect the individual investor. Note that discussions of proposed laws or regulations are prohibited.
◾Proposed regulations that are directly related to investing may be discussed if and when they are published for public comments.
.
Locked