Time to pull out of the market?

[Quest]

With overheated markets and Trump winning the election, I'm seriously considering liquidating my portfolio and retreating to cash and gold.

 

Looking for opinions.

[Aramara]

No, we will probably see a short-term boost in the economy (more akin to throwing diesel on the fire) due to the R’s textbook policy moves over the past 25 years or so that are best described as “short term gain, long term pain.”

Trump will throw diesel on the fire whether the economy needs it or not. But there will always be a “price to pay” for that approach; and if tariffs go forward as promised - that will settle timing and amount of the price that will need to be paid. I am already seeing that investors assume this is coming as well. Treasury yields are going up already. There is some correlation with decent economic data that can cause this too; but investors are altering portfolios already based on “short terms gains coming, but long term pains (inflation)” will be coming along too.

A lot of foreign investors are grabbing dollars now too for the ‘ole “switch-a-roo” to exchange dollars back to native currencies when the dollar loses strength on the foreign exchange market (dollar will strengthen in the short term, hit the inflection point where a stressed economy and inflation take hold, dollar starts to lose value against foreign currency; convert back to native currency - end up with more native currency than started with).

Note: dollar is already strengthening as numerous foreign investors are trading for dollars, american stocks, looking for securities, and so on.

So no personally I see the opposite where we're gonna see short-term boom in stock market and a crash right before Trump steps down. Trump in the end is a business man and he will do ANYTHING to have the stock market boom even if it comes at a price for later administrations to solve.

[Jannes]

If Trump lowers restrictions wouldn't especially big player companies become more powerful and rise in worth?

So it might be clever to invest in apple, microsoft, ...

Edited November 7 by Jannes

[Lyubov]

Why? The stock market performed well under Trump 

[Hardkill]

56 minutes ago, Lyubov said:

Why? The stock market performed well under Trump 

We will very likely have a recession by the end of Trump's presidency.

I wouldn't be surprised if we have such a severe recession like what happened in the 2008 financial crisis or something like the 1929 Stock market crash which led to the beginning of the Great Depression.

[LordFall]

Are you out of your mind? Why would the markets crash anytime soon? Especially Crypto is gonna be booming in the next couple months. Be careful of what happens with the tarifs but I'm not too concerned. If the american markets isolate themselves they're still gonna be the most powerful on earth just gonna be good to keep an eye on other markets and especially what BRICS is gonna produce over the next few months. 

[FourCrossedWands]

Why just retreat into cash and gold? There are hundreds of safe dividend stocks that usually just crash 10-20% on bad news and continue to rise even during recession.

Abbvie just crashed 12,5% today because of some minor bad news. Good time to buy IMO.

[Thought Art]

On 2024-11-07 at 7:12 PM, Lyubov said:

Why? The stock market performed well under Trump 

Thanks Barrack 

[Thought Art]

Economists have sounded the alarm on what will happen to the US economy under trump. We will see.

[Cocolove]

Bonds and CD's better than cash, but wouldn't bet on the USD its in a spiral of fiat death.

[FourCrossedWands]

6 hours ago, Thought Art said:

Economists have sounded the alarm on what will happen to the US economy under trump. We will see.

He is a "pro stock market" clown. He doesn't care about the actual economy. And the stock market is not the actual economy. It's just a couple of hundred companies that are supposed to represent the economy.

You can be 100% sure that under Trump, the stock market will go up. Also, there will be another speculative assets bubble, even bigger than in 2021.

[Staples]

It's way easier to wreck the economy than to improve it. 

And correlation ≠ causation. Whatever the economy does under Trump might not be strictly because of him.

Unless it obviously was his fault with the over aggressive tariffs.

Don't change what you do just because Trump is in, unless the tariffs directly affect you.

[ted73104]

Some people say we are already in a recession and going to enter a depression. I guess it depends on how you define things. However if you choose your stocks correctly, you WILL get significant earnings. The market already believes Trump will cut taxes for big corps and pull down regulations for them to expand. The tariffs could hurt the economy, but I don't think Trump is that dumb, he should be able to apply tariffs strategically.

Obviously there is a possibility that Trump could wreck the economy if his tariffs are just too high and too unrational, and if he's not able to get enough tax income from other channels or reduce the amount of government spending (which Elon Musk claims he can do). However this is not certain yet, Trump could still pull this off without hurting the US economy. Even if he does hurt the economy, he has too many tools to prop up the stock market, he'll do anything to create the appearance that the US is doing "Great"!

Actually, just read @Aramara's post.

Edited November 13 by ted73104

[Joshe]

Warren Buffett pulled a lot out. 

• In the first six months of 2024, Buffett sold approximately $97 billion worth of stock
• By August 2024, Berkshire had sold $75.5 billion worth of stock on a net basis in the second quarter alone

[Hardkill]

Even if we have another recession or depression during Trump's presidency, which is certainly probable, you still don't want to pull out any of your good reliable stocks out of the stock market with solid fundamentals.

Even Warren Buffett has consistently held onto his strong stocks through every recession, including the worst ones since the Great Depression. That's because he has always understood that these stocks will eventually rebound and reach new heights in the long run, once the economic downturn passes, regardless of how bad the economic climate is.

[Hardkill]

17 hours ago, ted73104 said:

Some people say we are already in a recession and going to enter a depression. I guess it depends on how you define things. However if you choose your stocks correctly, you WILL get significant earnings. The market already believes Trump will cut taxes for big corps and pull down regulations for them to expand. The tariffs could hurt the economy, but I don't think Trump is that dumb, he should be able to apply tariffs strategically.

Obviously there is a possibility that Trump could wreck the economy if his tariffs are just too high and too unrational, and if he's not able to get enough tax income from other channels or reduce the amount of government spending (which Elon Musk claims he can do). However this is not certain yet, Trump could still pull this off without hurting the US economy. Even if he does hurt the economy, he has too many tools to prop up the stock market, he'll do anything to create the appearance that the US is doing "Great"!

Actually, just read @Aramara's post.

God damn it!

Who told you that we are right now in a recession and that we are going to enter into a depression very soon?

Whoever told you that either doesn't know what the fuck they are talking about or has been deceiving you such as Joe Rogan, Alex Jones, Fox News, or Elon Musk's extreme brain-rotting X platform.

Come back to us next year, 2 years, 3 years, or 4 years from now if or when we really end up in a recession or real widespread economic crisis of some kind.

Edited November 14 by Hardkill

[FourCrossedWands]

There is some type of a hybrid recession going on right now. A lot of small businesses closing, but markets still going up. The top 500 companies keep growing, but millions of small companies struggle financially. People also struggle financially. Is it worse than in the 2000s? Probably not, but we should all be cautious. I am buying gold and recession-proof dividend stocks (healthcare, consumer goods, utility).

[LordFall]

Educate yourself(20-50 hours of podcasts and read books) on crypto and then buy it. Stock market is predicted to stagnate over the next 10 years but Crypto will go through the roof. I don't suggest fomoing into meme coins but understand the fundamentals of it and the value proposition and you'll be greatly financially rewarded for it.

Cash and gold will continue to stagnate or lose their value over the next 10 years IMO. Remember true inflation is around 10-12%, if your gold appreciates yearly by 8% it's losing purchasing power.