The Tea Party movement arose in order to reduce the national debt and federal budget. Its aim has been to reduce government spending while also lowering taxes. The new president wants to lower taxes and raise spending on the military. Along the way the stock market has gone up in anticipation of lower taxes, offshore money coming home and economic stimulus from massive infrastructure repair. The problem is that while the Republicans control both houses of congress and the White House they do not agree on the ways and means to govern. The investor needs to wonder, will an unwilling congress kill the Trump market rally?
Not in the Short Term
Donald Trump gave an excellent speech before congress last night and in response to the more tranquil version of this president the market has hit an all-time high. We have written that at least for the short term it is not too late to buy into the Trump rally. But congress and the president need to start getting together and passing laws for the euphoria to last.
After a moment’s hesitation the stock market started to rally after the election of Donald Trump. Many stocks have peaked but it is not too late to buy into the Trump rally. Why is that? Forbes suggests a dozen stocks that could double under Trump.
Goldman Sachs recently recommended over 80 stocks that are poised to jump during President Trump’s administration.
That’s a lot of stocks. Not all of them are dividend payers, and many of them have already jumped dramatically in the last few weeks, bringing them at or near their 52-week highs.
You might think this means it’s too late to buy into the Trump rally, but it isn’t.
Out of the Goldman Sachs 80 the writer in Forbes picks a dozen. The list is heavy in low priced dividend stocks and is entirely comprised of companies with long track records of good cash flow and reliable returns.
Goldman Sachs was the leader again in the last market surge. Investors are looking for good news and baring good news they are looking for rationality in the current president and congress. The time to be concerned will be when spending bills get stalled, tax cuts get hung up and petty bickering becomes the order of the day, much like when congress let the government shut down a couple of years ago.
If You Want a Successful Long Term Investment
The stock market may continue to go up based on optimism or it may fall when congressional and presidential dysfunction returns. But if you are in it for the long haul remember how many years are required to make an investment long term and that it is a mistake to mix politics and investment strategies. If you pick stocks in companies with solid business plans they will be making money in ten, twenty and thirty years and returning value to along the way. Think in the long term and look for bargains today. Then you don’t need to worry so much about how dysfunctional congress might become.