The big news story today is Donald Trump’s election victory. In fact, this will likely be the biggest news story of the year, and you’ll probably be reading backward-looking stories about how Trump won and the failure of polls and analysts to get it right and the mistakes his opponent made and blah, blah, blah.
But my specialty is growth stocks, so I’m going to focus on how the Trump victory impacts those … in a minute. But first…
There will also be a ton of stories about the big political changes to come and the possible economic consequences. Market commentators will be confidently predicting which stocks, sectors, countries and assets will be going up and which will tank, and where you should be putting your money. Growth investors, value investors, income investors, Millennials, Boomers, Gen-Xers will all be getting plenty of free advice, all followed by the instruction to “just click here.”
Unlike many big news stories, Trump’s victory deserves every bit of attention it will get. It’s a story so big that it will take months of writing and talking, opinionizing and analyzing, celebrating and mourning, finger-pointing and back-slapping to get our collective heads wrapped around it.
But through it all, there will be one source of absolutely real, completely honest and unambiguously useful information for you to follow, and that’s the U.S. stock market itself.
(I know you were probably thinking that I was going to say Cabot Wealth was that source, and I hope it’s true. We work hard to bring you investing advice that’s completely free of politics and immune to hype. But the advice we give is always dependent on what the market is doing, which makes the market itself the ultimate source of all our good advice … with years of experience and hard-won wisdom thrown in, of course.)
So while the headlines over the next few months will be full of news stories about the big transfer of power, cabinet choices, reactions from world leaders and still more post-election analysis, the one thing you need to do to prepare for a Trump presidency is watch the market.
I work with growth stocks, so my advice is for growth investors: If the market goes down, you will need to sell growth stocks and raise cash. Don’t let hope filter out that message. And if the market goes up, you need to be buying stocks on your watch list at good buy points. Don’t let politics come between you and the reality of a bull market.
Cabot Wealth won’t have much to say in the way of predictions about what a Trump presidency will mean. (We would have been similarly tight-lipped had the election gone the other way.) This is when the quotation from Jesse Livermore that’s carved above the fireplace in our Salem headquarters seems more applicable than ever.
It says: MARKETS ARE NEVER WRONG, OPINIONS ARE.
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