Trumpenomics … Be Brave!

Because I can’t resist David Rowe images of Donald, in the above cartoon he is shown leading the way – his loyal band of grifters, scammers, chancers and influencers are happily along for the ride. Slack Investor still finds it hard to believe that he has been elected again by the US people. This ‘second coming’, and all its associated upheaval and chaos, has been going on for less than two months!

‘The stock market is going to be great’ – _{Donald Trump – Investor Conference, February 19, 2025 – Rollcall.com} 

Perhaps I am selling Donald a bit short here, and Slack Investor hasn’t given his ‘genius’ policies the chance to work through in the long term. Although, picking a trade war with Canada, Mexico and China (and now, the rest of the world!) may not be seen by history as one of his ‘genius’ moves. Tariffs make imported products more expensive than domestic ones and might make sense in a limited way if you are trying to encourage local production. However, they inhibit trade and make goods more expensive. Virtually all economists think that the US tariffs will be bad for America – and for the world. So far, it is certainly bad for the stock market.

This is not a political blog, but his anti-science and chainsaw approach to cutting government departments seems random and very short-sighted. Also, Trump’s treatment of Ukraine using standover tactics on mineral deals, his commitment to the rich getting richer, his rejection of international treaties, and his ‘negotiating’ a Ukraine surrender on Russian terms – are all just appalling acts to Slack Investor.

What to do in times of Market Crisis?

Slack Investor would love to have some cash reserves while prices are low, however he is in retirement mode and fully invested. There might be some tinkering with the portfolio but, he will do mostly nothing. Slack Investor has his Stable Income Portfolio if he needs cash. If there is a need to sell any stocks, he will be buying other stocks in the same market. The worst thing to do, from a long-term wealth perspective, is to convert shares to cash in a down market.

Individuals who cannot master their emotions are ill-suited to profit from the investment process. _{– Benjamin Graham, Legendary Investor and Author}

Despite the Trump administration commitment to ‘Alternative Facts’. Slack Investor is guided by some established facts.

• The stock market is the best asset class for long-term returns above inflation. See the Vanguard 2024 30-Yr chart or Long Term Returns. This is the premium game in town for non-business owners to increasing wealth.
• The stock market is volatile. There will always be the swings between the market being overpriced, or underpriced, due to the news of the day. After a correction/crash, the market has always recovered to new highs. This happened after: Gulf Wars, Israel/Ukraine/Gaza invasions, terrorist attacks, GFC, COVID-19, etc. Trumpenomics is just one of those things that will affect the market in a temporary fashion.
• On average, the sharemarket falls by:
  • 5% – about 3 times a year
  • 10% – about once a year
  • 20% – every 3-5 years.
• Timing the market is just too hard (for Slack Investor). I have a long-term experiment going where I try to time the market in a methodical way using the ASX Index, the UK Index and the US Index. After 20 years, Slack Investor is either marginally ahead, or marginally behind, the markets. In all cases, in hindsight, he would have been better to buy and hold – and collect the dividends throughout.

There is still a need to constantly review your portfolio

‘I don’t think people understand there’s 100% correlation with what happens to a company’s earnings over several years and what happens to the stock.’ _{– Peter Lynch, Legendary Investor, Slack Hero}

In view of Peter Lynch’s wisdom, as the Australian reporting season is over for the first half of FY 2025 (up to the end of December 2024). I will do a review of my current holdings next blog to ensure that they are still, mostly, growing earnings companies.

Just a few of Trump’s quotes to mull on from shortlist.com. The Clown Prince Donald always has a lot to say …

‘I look very much forward to showing my financials, because they are huge.’ _{– TIME, 14/4/11}

‘My fingers are long and beautiful, as, it has been well documented, are various other parts of my body.’ _{– New York Post, 2011}

‘The concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive’ _{– Twitter, 19/10/15}

‘There are those that say they have never seen the Queen have a better time, a more animated time.’ _{– 7/05/2019}

‘What you’re seeing and what you’re reading is not what’s happening’ _{– 24/7/2018}

‘[Kim Jong-Un] speaks and his people sit up at attention. I want my people to do the same.’ _{– Fox & Friends, 15/6/18}

‘Sorry losers and haters, but my IQ is one of the highest – and you all know it! Please don’t feel so stupid or insecure, it’s not your fault’ _{– Twitter, 9/5/13}