Wednesday, November 7, 2018

Thoughts on the election results

As expected, the Democrats took control of the House, the Republicans kept the Senate. This is what the market expected, so there is no longer any uncertainty. Markets hate uncertainty. 

While I can't predict the future, I think we can expect markets to return some gains over the next several months. Today may be the confirmation that the correction has changed to another uptrend. I added to my equity holdings Monday in anticipation of this event. 

But having said that, make sure you have a plan to exit (sell) if the market should decide otherwise. 

Really, I don't think anything is going to happen as far as Washington D.C. is concerned. With a split government, there'll be a lot of talk, but little action. No changes in taxes, immigration, health care, etc. Just the status quo. Which also may be good for the markets. With Democrats in control of House committees, expect more investigations, grandstanding and plenty of theatrics. But this will go nowhere, and just waste time and taxpayer money. 

The only pressure on the stock and bond markets are the Fed, China and trade, and global economic performance, so stay informed. 

One thought on investing in stocks. Do not make the mistake I made recently. Do not buy a stock when earnings are about to be reported. I had a position in a stock for a few days, the earnings came out, the stock gapped down below my stop. Not nice. Fortunately, it was not a large position. So do your due diligence and don't forget to look at the earnings calendar for the company you want to invest in. Wait until earnings are reported to see how the market will react. If you're holding a stock long-term, just be aware of what might happen. 

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