For those investors who did not live through the Reagan boom years, the roaring ’80s and the decades after, a little history is in order. When the teflon president took office, he inherited a mess, just as our current POTUS did. When Ronald Maximus was sworn in, interest rates were sky high, American credibility and foreign policy were in shambles around the world, the military was eviscerated, and the misery index for American citizens was through the roof. Interestingly enough, it only took a few common sense policies to right the ship for a generation of American citizens. The securities markets saw a roaring 20’s-like period where vast amounts of wealth was created.
Donald Trump will, and has, done the same thing and the markets will react accordingly over the long haul.
Markets are a harbinger of the future. They look forward, not backward. ‘Progressives’ simply can’t understand why the stock market keeps climbing (with obvious natural corrections), and the talking head pundits consistently declare it can’t continue. But it does.
There is a simple reason — Donald Trump will be re-elected, regulations will continue to come down, economic activity will skyrocket, taxes will stay low, government will be friendly to business and earnings will grow. This will create valuations we have never seen before. The benefits to America will last for decades, just as with Reagan.
Yes, we have an interest rate risk problem, and yes, interest rates will rise. However, the economy will shrug it off as it grows. This exponential growth will cause increased tax revenue, which will hopefully help to pay down our soaring sovereign debt. Once the market sees we are serious about dealing with the problem, stocks will rise even higher as confidence soars.
I’m not talking about buying for next week, I’m talking about buying for 2030, when the equity markets will be stunningly higher from where they are now. Any Millennial out there needs to take notice. You are living in historic times for America, with historic opportunity, where you can build incredible wealth over the long term.
Like I said, buy the f’ing dips and hold. Check your portfolio in ten years, you’ll be very happy.