Examining The Financial Trump Rally
In the early morning of November 9th, 2016, Trump was declared the President of the United States after Hillary Clinton conceded. For business men and women, especially those in the stock business, this was a defining moment, and as seen with every President, there are economic effects that have to be felt.
Within a couple of days, stocks began to rally and the dollar was strengthened to levels that haven’t been seen for over a decade. Trump’s economic agenda might be among the reasons that saw the strengthening of the dollar, or it might be his economic policies that have increased investor confidence.
This effect has now been named after the man to whom it is owed, and it is known as the Trump Rally. No, not the rally as it relates to protests or large gatherings for Trump supporters, but the one in terms of finances.
Lou Dobbs Commentary:
What exactly is the Trump Rally?
The Trump Rally is the positive effect on the economy that the election of Donald Trump as President has had. Just when it was clear that Trump was going to win the election, the stocks fell by about 5% on the evening of November 8th, and a number of people predicted that the market might crash if Trump wins the presidency.
On the morning of November 9th, when Trump was to give his acceptance speech, the stocks were still quite low. However, the stocks rose significantly and by the end of the day, the stocks had not only recovered the losses from the previous day, but they had also risen by 1%. This alludes to the economic policies that Trump has, which are seen to favor investment.
[Donald Trump News For Internet Entrepreneurship]
There has been quite a race in the stock market, and most countries have joined in the rally. Europe has been rallying as well, and the effects seen in most of these markets are figures that have not been seen for a long time. In just three and a half months, the stocks indices have lifted by a whopping 10%, a level that has not been seen in the last thirteen years.
[Forbes: Wall Street-Friendly Era]
The reasons behind the rallying are varied, and everyone seems to have a different opinion. The first speculation is the economic promises by President Trump. These include the promise to cut costs, less strict business regulations and turning infrastructure into a tax incentive. It could also be that the economy is getting better under the leadership of President Trump. Whatever the reasons, a lot of investors are riding the Trump Rally in an effort to increase their profits.
Video Commentary From AvaTrade
How Investors are Taking Advantage of the Trump Rally
With increased confidence in investment, there has been a race to gain using the Trump Rally. Stock rallying has been the method through which investors have been riding the Trump Rally.
The Trump Rally has been characterized by an increase in the purchase of stock. This increase in the stock trading has been as a result of increased investor confidence, which has directly led to an increase in demand for stocks in the market. An increase in capital and investments for companies have been realized, rising to up to as high as $100 million. Shareholders are releasing their shares at very high values, and investors are scrambling to get these shares.
However, there is quite a number of risk associated with the Trump Rally. First, it is not known to be permanent or a temporary occurrence. The investors are mostly dependent on the enactment of the promises made by president Trump, including reduced taxes and reduced restrictions on investments. The fear is that if these promises are not upheld, the investors run the risk of losing the amount of money that they use to invest.
TheStreet Discussion On Tech Stocks:
The other threat is the threat that the market will falter just as fast as it gained. At the moment, the stock market is riding on the crowd effect towards investment. The first person was driven by Trump’s promises, the second person was driven a bit by Trump and a bit by the first person, and now everyone is riding on the high that is the crazy number of investments. The fear of this is that this is a house of cards, and the slightest falter in confidence might lead to a crash in the market, back to the values from before the election, or even lower.
The Role of Online Investing and Trading
Online investment is the buying and trading is the buying and selling of stock electronically, and it plays a major role in everyday investment. You should read this post for further details regarding online investing.
Online trading is important for several reasons. First, online trading can play a role in your overall financial plan. If you buy and sell stock regularly, and you do it well enough to earn you some regular amount of money, you can add it to your financial plan. Secondly, with online investment and trading can be practiced as a side hustle, away from your main job. A knowledge of the stock exchange and trading values is necessary, no other knowledge is necessary.
There are three major ways through which you can participate in online trading. These three ways also are playing a major role in the Trump Rally as well. They are Forex, Bitcoins trading and Penny stocks.
Forex trading is a global market where different countries trade currencies. When visiting a new country, you are expected to use the currency of that country, and therefore, you change your dollars to, say, South African Rand. The amount of money you get when trading while getting into the country may be 13.22 Rand. While leaving the country, you need your dollars back, and while trading, you might be required to give 13.27 Rand for a dollar. This is foreign exchange. On a larger scale, a person may buy and sell the South African Rand, depending on how much it is trading against the dollar.
Foreign exchange can be done online, and in the Trump Rally, the investors have been riding on the strength of the dollar, buying it at very low prices and selling at relatively higher prices.
The role of bitcoins in the Trump Rally, which is traded online as well, cannot be understated. Bitcoin is a digital currency that can be bought, sold, saved and even cashed. During the Trump Rally, the bitcoin has been seen to stabilize due to an increase in investor confidence. Before Trump got elected, the bitcoin was trading at below $1000, but has stabilized and is now trading at approximately $1185.
Penny stocks, also traded online, are stocks with relatively higher risks and higher speculations, and they trade outside the major stock exchanges. They lack liquidity and are mostly traded over-the-counter, even though they are traded online as well. Riding the Trump Rally, investors have been buying penny stocks, due to a relatively safer cushioning. However, most investors have been hesitant, because, either way, penny stocks are high risk.
This just goes to show just how much the Trump Rally has been good to online investment and trading.
In conclusion, the Trump Rally is great for the American market and everyone working in it. The rush for gold is real, and the high demand is great. However, the uncertainties surrounding this rush are just as many, and the best course of action for any investor is to wait and see where this goes, and when there are fewer uncertainties, then invest.