There’s a quote from a book I read in college that I always loved: “There is only one kind of shock worse than the totally unexpected: the expected for which one has refused to prepare.” (It’s from Mary Renault’s The Charioteer for those who are curious.)
Now, a number of years later, I’m reminded of those words as we move into this new administration.
As you know, President Trump was inaugurated yesterday as the 45th president of the United States — and our investment experts here at Banyan Hill are echoing the same advice about the stock market’s reaction:
Prepare for the unexpected.
The unexpected is the expected here. Trump’s administration is simply a wild card — or a deck of wild cards, if I’m being honest.
We do know that Trump’s first 100 days will likely bring a hurricane of activity that changes significant U.S policies, such as Obamacare, immigration policy, trade agreements and more. But there’s no way of telling exactly how all of this is going to play out.
As Jeff Opdyke told his Frontline Investor readers:
The election of Donald Trump was an asymmetrical event, and his administration could (probably will) have an asymmetrical impact on global economics and politics. In short … we should expect the unexpected.
More to the point, we should be expecting a whole lot of volatility. As Chad Shoop told his Pure Income readers:
There is one thing we can surely expect in the coming months — and that’s increased volatility. There is a ton of uncertainty surrounding his administration’s agenda, so the market doesn’t have a feel for how things will play out. Any hiccup within his own party, with trade relations with China, Mexico or Russia, a fallout on the repeal of the Affordable Care Act and so on will see volatility come roaring back into the markets.
And all it takes is that one hiccup to throw a wrench in the Trump rally we’ve been seeing in the stock market ever since November 8.
See, we’re now in a new era, following a stock market caught in the midst of a post-election rave party that’s pushed it to ridiculous valuations. The Shiller price-to-earnings (P/E) ratio on the S&P 500 is around 28 — one of the richest levels ever.
And every time it’s been near here, a crash has ensued (think: the tech bubble of 2000 and the Great Recession).
That’s why we stress that you have safeguards in place in the event of a collapse. It’s never been more important than now.
And it’s why Chad, Jeff and our other experts have been looking at unique ways to help you protect yourself — or even profit — from what’s coming ahead. You can get access to their advice on how to ride out the next four years, and more, by clicking here.
By the way, before I sign off, I just want to introduce myself.
Jocelynn Smith tends to write these Saturday notes to y’all, but she’ll be writing to you on Fridays from now on. I’m taking the reins of these dispatches, and some of you might already know me. I’m the managing editor for our premium publications, and I used to pop up every now and then in Total Wealth Insider weekly a couple years ago. I’ve even met some of you at our conferences over the years.
Now I’m excited to be back at it with this Saturday note. If you ever want to get in touch with me, you can always reach me at SovereignInvestor@banyanhill.com.
Talk to ya’ll next week.
Regards,
Jessica Cohn-Kleinberg
Managing Editor, Banyan Hill Publishing
