You thoughts. Many people say now "Buy the election, sell the inauguration".
How long is this bull market going to last?
- Thread starter Michael J. Fletcher
- Start date
If we only knew the answer to that riddle...
Sometimes history can give us the answers to difficult questions about the future. If we look at history in this case we could conclude that the current bull market should last roughly as long as "Trump University." The Rally, as we have seen, is experiencing an enthusiastic beginning in anticipation of wealth and success to come. We are obviously in the very early stages of what is to be a bull market, riding on the coattails on a long, slow recovery from a deep recession. In approximately two years reality will begin to take hold, followed by a sense that one has been had. We will become cautious in recognition that our initial investment is not panning out quite as we would have hoped. Then the blame phase will begin, and those responsible will maintain the charges have no merit, quickly settle and move on. The entire cycle should takes a number of years, approximately six to eight.
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It's already about 7 years old with a long time since even a major correction. Historically that is a good run. Anything on top of this is just gravy. Those of us who lived through 2009 fully invested aren't too worried about the last days of this bull. We will probably never sell, but it looks like who won is not important. Many just postponed adding new money until after the election, not based on who won.
One of the main drivers of assets prices has been the low-interest rate environment. If Trump will spend 1 trillion on infrastructure then this should increase inflation. With the 5% unemployment rate and if rising inflation comes then this will mean the fed will be forced to raise interest rates.
The increased interest will mean there will be less demand for stocks from borrowed money also there is the question of whether the average working and middle class Americans can afford higher interest rates especially as they are living pay check to pay check?
The increased interest will mean there will be less demand for stocks from borrowed money also there is the question of whether the average working and middle class Americans can afford higher interest rates especially as they are living pay check to pay check?
Piezoe, clearly you must understand this was going to happen regardless of Trump. The Dollar broke out long before this election and that is the main driver here. In fact, the Dollar broke out assuming a Clinton victory. Everyone keeps ignoring the dollar and is falsely attributing this rally to so called "infrastructure" spending. That has NEVER propelled stocks higher broadly, only certain sectors. We are seeing major breakouts in the banks due to the steepening yield curve and foreign investment due to the stronger dollar. The only question related to Trump is will he keeps his damn hands off the steering wheel and let it go or will he inadvertently stop it.
This market was in a standstill for a year during campaign season and is now playing catch up which makes it look like this rally is all because of Trump when in reality a lot of it was the pent up demand waiting to be unleashed.