2016 Election Effect - Speculation & Surprise

12 Nov 2016 12:56

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On Monday, before the elections, much of the media had Hillary Clinton beating Donald Trump and most financial and fund managers had the same view and as such positioned stock investments based on a Clinton Presidency.

On Tuesday the day of elections or more precisely early on Wednesday around 2am in the morning it became clear that Trump was the new President elect. International markets responded negatively and sent U.S. futures cratering down past 5%. But as the morning moved closer the sentiment was quickly changing and futures were improving. At the opening bell the market took off into positive territory and would remain that way through to Friday with the Dow up just over 5% for the week.

Financial pundits and spin doctors were labeling it as the "Trump Rally" and were touting how beneficial Trump will be to business and U.S. markets. This was extremely laughable as these were the same people who just a week earlier were stating a Trump Presidency would be the worst thing for Wall Street. These folks will do anything to sound like they are always right and why it pays to tune out the noise from Wall Street and the media.

Personally I have no clue if Trump's Presidency will be beneficial or not and only time will tell. Regardless what happens in the future I will continue to evaluate and pick stocks based on Liquidity, Profitability, Credit Risk, Shareholder Value and Growth.

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