Is It Business As Usual? Investors Await Clear Signals!

The Trump win might not be bad for markets!

Republican Donald Trump stunned the world last Tuesday night, November 8th, 2016, by defeating heavily-favored Hillary Clinton in the race to the White House.  This now ends eight years of Democratic rule and sets the United States on a new and uncertain path.

Donald Trump’s victory shows that the markets are hoping that, as president, he will act in a rational manner once he takes office. His acceptance speech appears to have gone down well with stock market participants.

He is clearly pro-business and pro-Wall Street. He believes in less regulation and in letting businesses thrive. Trump proposes to reduce taxes across the board, which will boost consumption. He plans to lower the business tax rate from 35 percent to 15 percent and eliminate the corporate alternative minimum tax. This will result in larger savings for corporations and boost earnings. I feel that his biggest measure is a one-time offer to businesses to repatriate business profits from overseas back to the USA by paying a tax of 10 percent. This would help boost the U.S. dollar.

Mr. Trump favors much smaller number of federal regulations than the Obama Administration. He has no specific plans on imposing restrictions on banks and Wall Street firms. The markets should view this as a favorable factor to the U.S. stock markets.

He proposes to renegotiate the NAFTA (North American Free Trade Agreement) with Canada and Mexico. The Trans Pacific Partnership (TPP) deal will be put on hold. The TPP imposes a countervailing duty on Chinese imports and use tariffs to eliminate trade deficit.

Investors Should Brace For A Further Slump In Global Stock/Bond Markets!

His triumph was a rebuke to President Barack Obama’s failed economic policies that have been implemented over the past 7 years. This election was about JOBS, JOBS, and new JOBS!

Bank of America Merrill Lynch reported that global bond investors lost $337 billion yesterday, November 9th, 2016. Thursday morning, November 10th, 2016, the Stoxx Europe 600 had climbed back up 4.6% from its post-election low, the FTSE jumped 0.70% in early London trading, the DAX is currently up 1.02%, and Asian stocks rebounded, with the Nikkei 225 surging by 6% in Tokyo.

Today, the best investment opportunity is to be in is cash. Yes, you read it right; cash is the best investment possible today. markets move very fast without providing much time, and one needs to be ready with the trading plan. This is where my expertise lies! There are times when making money should not be your priority; the main goal should be to sit tight with your cash and do very little. I have been recommending for a long period now to SELL the bounces, so you should be out of stocks and ready for my next big trade suggestions. Do not fall for the various experts who advocate being fully invested in stocks or other asset classes. Read on and decide for yourself if you agree with my concept of holding cash.

Staying primarily in cash is an opportunity to buy when everyone else is selling in the next panic. A smart investor should keep his shopping list ready and pick his favorite asset classes for pennies during market downturns. You might get a chance to buy your favorite asset 20% to 30% lower than current levels. What percentage of your portfolio you should hold in cash depends on your investing philosophy, but in the current scenario, let your cash holding be the maximum you have ever held in your portfolio.

The Bottom Line:

Jim Roger is following a cycle analysis similar to ours, as he is saying:

The main cause is the Federal Reserve, and Washington, D.C., more broadly. They’re accumulating gigantic debts and doing huge amounts of money printing. That can’t last; it’s going to cause problems for all of us down the road. If you’re looking for a single culprit, it’s Washington, D.C.  It’s already happening. In 2015, for instance, twice as many stocks were down on the New York Stock Exchange as were up. It was disguised by the averages, but the averages are dominated by 15 or 20 big stocks that never go down. Most stock markets are down around the world. Japan is already in recession. It’s just not visible to the press or to the public yet. Something similar happened in 2007.

In our latest trades this week with our active trading partners newsletters, we took profits on EDZ for a 20.7% profit, and UGAZ locking in another 14% profit in just 2 days.

Shouldn’t you also be following our time-tested proven trading analysis?

Chris Vermeulen –

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