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  #1  
Old 10-09-2016, 06:38 PM
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Default Walstreet thoughts

The election and domestic equities

There’s been a lot of discussion lately about how this year’s election may affect the U.S. market as a whole, as well as individual sectors. Here’s our take.

If Clinton wins:

A push to reduce reliance on fossil fuels could boost alternative energy companies while putting pressure on traditional oil- and gas-based ventures.
Certain health care companies could benefit from Clinton’s commitment to refining or expanding the Affordable Care Act of 2010.
Clinton’s advocacy of various new regulations could pose challenges for certain sectors and industries—for example, financials and pharmaceuticals, the latter of which could be affected by her stated desire to curb drug costs.
Because Clinton has proposed an increase in corporate taxes, there could be at least slight downward pressure on overall corporate earnings, while a possible increase in taxes on high earners could trigger a shift in corporate dividend policies.
If Trump wins:

Biotechnology and financial stocks could benefit from less regulation, including a possible repeal of the Dodd-Frank Act (though Trump has also suggested he’d consider a return of Glass-Steagall).
Trump’s America First Energy Plan could expand domestic exploration and production, benefiting traditional domestic energy companies.
The potential repeal of the Affordable Care Act (as indicated by Trump’s campaign) could cause volatility in the health care sector, especially for hospital and managed care companies.
Reduced corporate and individual taxes, if passed, could support corporate earnings and stoke further demand for dividends.
News of Trump’s election could trigger short-term market volatility, as Trump is relatively new to the political scene, and investors may be less certain about how his policies may play out.
Note that stocks in the defense industry could benefit from either a Clinton or Trump presidency, as both candidates have expressed interest in maintaining—or, in Mr. Trump’s case, significantly expanding—investments in the U.S. military.

We need Trump to win BADLY
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Old 10-09-2016, 09:14 PM
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There been a lot of talk...that's about it. The fact of the matter is if the market cared about a shitty President it would have crashed eight years ago. 2008 belongs to Clinton, but that is another topic for another day so it doesn't count. What markets care about is certainty. None of the "talking heads" have a clue who will be better in the end for the markets.

Here's my take: We'll see volatility for the next month. If Trump gets elected we'll see something like BREXIT. Like it or not, Trump is a wildcard. He brings more uncertainty and markets don't like that. Once he gets elected(if he gets elected) we'll have more volatility for a short while and then the markets will stabilize. From there we'll have to see what can be accomplished with him as President. If reduces the tax rates that could be huge and we could see returns similar to 1980-1990.

Currently we're in a secular bull market that has years left to run. This is way more important than the shit show that's currently on Fox.

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Old 10-09-2016, 09:32 PM
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If Clinton wins, the stock market will roughly remain the same as she continues to push the Democrat agenda. A little bit of growth mixed with a little bit of drop.

If Trump wins, the market will probably drop 10-15% until everyone sees what he is really all about. No clue what will happen by the end of 4 years if he is elected.

If you are worried, move your money out of stocks. I might of made a mistake but I moved about 80% of my and the wife's 401K to money market and stable funds a week or so ago. If I miss a runup, then I just miss it, but I have a feeling that within the next 3-4 week period, a big drop is going to hit the market.
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Old 10-10-2016, 06:13 AM
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Originally Posted by Sixes View Post
If Clinton wins, the stock market will roughly remain the same as she continues to push the Democrat agenda. A little bit of growth mixed with a little bit of drop.

If Trump wins, the market will probably drop 10-15% until everyone sees what he is really all about. No clue what will happen by the end of 4 years if he is elected.

If you are worried, move your money out of stocks. I might of made a mistake but I moved about 80% of my and the wife's 401K to money market and stable funds a week or so ago. If I miss a runup, then I just miss it, but I have a feeling that within the next 3-4 week period, a big drop is going to hit the market.

What's say Red? Timmy on to something? I never once moved any of mine around. Just sit on it and ride it out, but I'm getting a good amount built up in my 401K now. Hate to see it go backwards.
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Old 10-10-2016, 08:18 AM
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The chances of a 10-15% pullback in the next 6 months is very slim barring a "Black Swan" event(think 911). In mid September we experienced the 3-6% pullback(3.4% to be exact) we had been expecting. The markets are in tightly bound range similar to what we've seen over the last couple of years. If we break out to the upside of the current chart pattern it would suggest the markets grinding higher through the first qrtr of 2017. If we break out to the downside we could see some more consolidation.

Regardless of who wins, your strategy is what's important. Trying to time the markets has never worked, and that's not going to change because of this election. The problem with timing is that you not only have to get the "getting out" part right you have to get the "getting back in" part right too and that's not going to happen. If you have an appropriate strategy to start with there is no reason to raise excessive amounts of cash due to this election.

I'm also not saying Tim is wrong. He might very well be correct in that the market drops 10-15% if Trump is elected. I'm saying the probability of that is very small. There are much more important things on the market's "radar" than Trump and Hillary, and history doesn't support the theory of a massive drawdown in the markets regardless of who gets elected.

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Last edited by Ol' Red : 10-10-2016 at 08:31 AM.
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Old 10-10-2016, 08:39 AM
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Originally Posted by Ol' Red View Post
The chances of a 10-15% pullback in the next 6 months is very slim barring a "Black Swan" event(think 911). In mid September we experienced the 3-6% pullback(3.4% to be exact) we had been expecting. The markets are in tightly bound range similar to what we've seen over the last couple of years. If we break out to the upside of the current chart pattern it would suggest the markets grinding higher through the first qrtr of 2017. If we break out to the downside we could see some more consolidation.

Regardless of who wins, your strategy is what's important. Trying to time the markets has never worked, and that's not going to change because of this election. The problem with timing is that you not only have to get the "getting out" part right you have to get the "getting back in" part right too and that's not going to happen. If you have an appropriate strategy to start with there is no reason to raise excessive amounts of cash due to this election.

I'm also not saying Tim is wrong. He might very well be correct in that the market drops 10-15% if Trump is elected. I'm saying the probability of that is very small. There are much more important things on the market's "radar" than Trump and Hillary, and history doesn't support the theory of a massive drawdown in the markets regardless of who gets elected.

Red

Thanks!
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Old 10-10-2016, 09:40 AM
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Mr Red please make sure my small amount is handled. I need to send you another check for my 2016 contribution. Still playing the "give it to Red or pay down debt" debate.

Kind of like a presidential debate but without the idiots.
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Old 10-10-2016, 09:53 AM
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Mr Red please make sure my small amount is handled. I need to send you another check for my 2016 contribution. Still playing the "give it to Red or pay down debt" debate.

Kind of like a presidential debate but without the idiots.
You're good allocation-wise. Depends in the debt. I always recommend paying off debt like cars, credit cards, boats, etc before making the retirement plan contribution.

Red
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Old 10-10-2016, 10:35 AM
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All mine is real estate. Residence and rentals.
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Old 10-10-2016, 11:32 AM
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The only reason that I moved mine out of stocks is just the uncertainty of country. Will it fall, I have no idea, could it fall, I think yes it could. But that possibility is always out there and could happen at any time. I just felt I wanted to be in a more stable environment.

All I did was move a big portion of it out of stocks to more secure options, I didn't stop my contributions nor did I change what I have been investing in, I am still putting in 11% plus ~6% company match into the same investments.
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Old 10-10-2016, 11:51 AM
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Im new to this game. I just now 4 months ago, after 17 years of employment with the state, started a 403b through VALIC . I don't know much about it yet but I'm putting all I can possibly afford into it and hopefully in 13 years, there will be something there.

I wish I had done it since day one. 60% of the average of my best two years won't be enough to retire and not work. I can put in 40 years and get 80%
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Old 10-10-2016, 12:12 PM
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Quote:
Originally Posted by Sixes View Post
The only reason that I moved mine out of stocks is just the uncertainty of country. Will it fall, I have no idea, could it fall, I think yes it could. But that possibility is always out there and could happen at any time. I just felt I wanted to be in a more stable environment.

All I did was move a big portion of it out of stocks to more secure options, I didn't stop my contributions nor did I change what I have been investing in, I am still putting in 11% plus ~6% company match into the same investments.
It could fall at any point, you're correct. With that rationale you'd never invest in a "risk on" asset class. By stable, what do you mean? No money market will produce a 3% net of fees ROR. By using one the only thing you guarantee is that you'll lose purchasing power. Do you have a stable value option or money market fund? These are two very different things often used synonymously. Inside a 401k you need to be careful about holding periods with stable value funds. Some require a year hold and can penalize you via MVA(Market Value Adjustments) if you try to trade in and out too many times.

Some money market funds have a negative yield right now. The American Funds Money Market Fund is one of them. The yield is lower than the fee thus giving you a negative yield. "Safe, secure, and stable" don't mean what people think they do.

Red
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Old 10-10-2016, 12:14 PM
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Quote:
Originally Posted by Gimp View Post
Im new to this game. I just now 4 months ago, after 17 years of employment with the state, started a 403b through VALIC . I don't know much about it yet but I'm putting all I can possibly afford into it and hopefully in 13 years, there will be something there.

I wish I had done it since day one. 60% of the average of my best two years won't be enough to retire and not work. I can put in 40 years and get 80%
Max it out if you can. Some gov't plans also have a 457 option. If you max out your 403B you might be able to put even more away in that plan.

Red
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Old 10-10-2016, 01:13 PM
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All I hear is blah blah blah I'm a dirty skank.


This is why I just stroke out a check every month and let someone else (ol red) think about it and figure out what to do
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Old 10-10-2016, 01:32 PM
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All I hear is blah blah blah I'm a dirty skank.


This is why I just stroke out a check every month and let someone else (ol red) think about it and figure out what to do
Ditto and with Red except I usually do it yearly. Skip some years and pay down RE debt. Rentals are part of my retirement plan and my simple mind sees it as being the same thing except I can't deduct principal payments.
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