David Remnick writes, in the New Yorker:
The election of Donald Trump to the Presidency is nothing less than a tragedy for the American republic, a tragedy for the Constitution, and a triumph for the forces, at home and abroad, of nativism, authoritarianism, misogyny, and racism. Trump’s shocking victory, his ascension to the Presidency, is a sickening event in the history of the United States and liberal democracy. On January 20, 2017, we will bid farewell to the first African-American President—a man of integrity, dignity, and generous spirit—and witness the inauguration of a con who did little to spurn endorsement by forces of xenophobia and white supremacy. It is impossible to react to this moment with anything less than revulsion and profound anxiety.
Read the rest here.
Hillary got more votes than Trump, but Trump “won” — just as Bush “won.” Laurence O’Donnell puts Alexander Hamilton’s unintended consequences into high relief.
(And read about the National Popular Vote Interstate Compact, that would solve this problem, here.)
Gray Chang: “As you’ve mentioned many times, stock markets tend to fall during Republican administrations. With the market at an all-time high and a very uncertain future, might this be an occasion where ‘market timing’ is advisable? Like moving a large portion of one’s portfolio into cash for a few years?”
☞ Great question, of course.
Actually, the market doesn’t tend to fall under Republican administrations — it just does much less well.
I have no clue whether that will be the case now.
Well — I do have a clue. No way the market could more than triple under Trump as it did under Clinton — or nearly triple again as it did under Obama.
But it wouldn’t have under Hillary either. It’s just too high now to triple any time soon; and odds are interest rates will eventually rise, which acts as a further headwind. Higher interest rates damp down profits and economic growth and make bonds incrementally more attractive as an investment alternative.
That said it ordinarily is a mistake to “time the market” — especially if you incur taxes as you jump in and out.
But would this be a good time to lighten up if you’re heavily invested? Especially if you’re nearing retirement? A time to set aside some cash in case there’s an opportunity in the next few months or years to buy back in at 20% or 40% off?
For many, I think that could make sense.
For those who invest in specific stocks rather than — generally preferable — index funds, there is some chance your favorite stocks will rise in a falling market. But the best most stocks can manage in a bear market is to fall less than average and then to recover in a big way once the market rebounds. That’s what I’m hoping of mine, almost all of which I will continue to hold.
And who knows? Unlike most Republican administrations, which tend to be conservative, Trump might be able to enact the massive infrastructure revitalization Obama proposed but the Republican Congress blocked. That alone could throw the economy and wages and corporate profits into higher gear and buoy stocks.
Or he might ignite a trade war that led the world into global depression.
Or cut taxes for the rich, ballooning the deficit and shaking faith in the dollar, igniting a vicious cycle of rising interest rates and falling home prices (how much would your home be worth if your prospective buyer faced a monthly mortgage payment double what we’re paying now?) that depressed consumer confidence, economic activity, profits, and stock prices.
Or, facing multiple lawsuits and perhaps the release of hours more “locker-room-talk” type tapes — or some revelation of active collusion with Putin’s team to rig the election, not just routine contact — maybe something entirely unexpected will happen. (Probably not.)
I sure don’t know.
But that’s the point. With stocks near record highs and so much uncertainty, it seems to me that anyone with a lifetime of asset-accumulation to protect (as opposed to a 26-yearold just beginning to build her 401k) would not want to be 100% in stocks right now.
Have a great weekend. Or at least as good a weekend as you can, under the circumstances.
Quote of the Day
A penny saved may be a penny earned, but it's one boring penny. A penny invested, on the other hand, bounces around. It gets bigger one day, smaller the next. A bit player in the drama of global finance, that penny buys a guy a balcony seat in the theater of macroeconomics.~Susan Stewart
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