Trump is president...how can we make money?

Ask your investment, budget, and other money related questions here
User avatar
jennypenny
Posts: 5291
Joined: Sun Jul 03, 2011 2:20 pm
Location: Stepford USA

Re: Trump is president...how can we make money?

Post by jennypenny » Mon Feb 27, 2017 5:57 pm

Poor Howe. With all of the crazy attention on Bannon, and now his admiration of Howe's book, The Fourth Turning is morphing into The Populist Manifesto. Howe's trying very hard to reel it in, but the book could become forever associated with Bannon and Trump. Bannon admitted to using it as a playbook for getting Trump elected. If something dreadful should happen, I could see Howe getting some of the blame indirectly.

User avatar
jennypenny
Posts: 5291
Joined: Sun Jul 03, 2011 2:20 pm
Location: Stepford USA

Re: Trump is president...how can we make money?

Post by jennypenny » Sat Mar 04, 2017 6:47 am

getting back to the OP ...

Does anyone think Trump's immigration stance will negatively affect Munis, particularly what looks like an unavoidable confrontation with so-called sanctuary cities? I've kept a bit of cash in muni funds over the last year and I've been very happy with them. But now I'm worried that the immigration fight combined with the pension crisis might damage them. OTOH, raising rates will help them a little.

I could talk myself either way on this one. I love the tax benefits and monthly distributions of munis. I used to use mREITs for regular income (and the div was high enough to offset the tax burden) but the interest rate uncertainty scared me off. Maybe I should look at those again. I have some traditional REITs in the healthcare sector (the only REITs I see capable of growth going forward).


Second question ... will the repeal of Dodd-Frank mean that BDCs will get hammered by competition from banks?

IlliniDave
Posts: 1675
Joined: Wed Apr 02, 2014 7:46 pm

Re: Trump is president...how can we make money?

Post by IlliniDave » Sat Mar 04, 2017 4:40 pm

jennypenny wrote:getting back to the OP ...

Does anyone think Trump's immigration stance will negatively affect Munis, particularly what looks like an unavoidable confrontation with so-called sanctuary cities? I've kept a bit of cash in muni funds over the last year and I've been very happy with them. But now I'm worried that the immigration fight combined with the pension crisis might damage them. OTOH, raising rates will help them a little.

I could talk myself either way on this one. I love the tax benefits and monthly distributions of munis.
I just did my taxes this afternoon and the exempt interest was one of the few bright spots of the day.

Specific to Trump, I don't see any meaningful adverse affect on munis from his immigration policies. I don't think there will be any long-term "standoff" between the feds and certain blue states.

But then again, I rarely try to outguess the market. I have a pretty decent stake in munis and intend to add to it this year. If I'm still alive, my expectation is that I'll still be collecting income from these bonds (actually mutual fund shares) 20 or 30 years from now. With that sort of time horizon, all the standoff nonsense should be just a blip.

User avatar
Chris
Posts: 504
Joined: Thu Jul 22, 2010 2:44 pm

Re: Trump is president...how can we make money?

Post by Chris » Sun Mar 05, 2017 2:01 am

jennypenny wrote: Does anyone think Trump's immigration stance will negatively affect Munis, particularly what looks like an unavoidable confrontation with so-called sanctuary cities?
Trump's ability to cut off funding to sanctuary cities is much more limited than he says. First, there are legal limits to what the federal government can do to coerce states and municipalities, and most of that power lies with Congress anyway. And then there's social pressure. How will it look if Trump cuts federal law enforcement grants to NYC in the name of national security? It's hard to even think NYC without thinking 9/11. And Chicago: how would he square cutting their funding and also reducing the homicide rate (one of his ongoing pledges)?

There are other bear cases for muni bonds though. A sharp reduction in tax rates or elimination of the AMT will make muni's tax advantages less beneficial. Though I'd expect bond holders in high-tax jurisdictions (NYC again) still have plenty of reason for holding.

There's also speculation out there that tax reform will include eliminating the tax-free nature of muni bonds at the federal level (in exchange for an overall lower tax cut). I'd bet against this idea, since it runs counter to another Trump priority, which is infrastructure spending. Since states and municipalities handle most infrastructure, whatever plan there is will include them needing to spend money.

User avatar
Dragline
Posts: 4443
Joined: Wed Aug 24, 2011 1:50 am

Re: Trump is president...how can we make money?

Post by Dragline » Sun Mar 05, 2017 11:15 am

Attempting to cut off federal funding for particular cities or states "because you don't like what else they are doing" is probably unconstitutional or at least violates the statutes establishing the benefits and programs themselves. State AGs would sue in a heartbeat and probably win.

I agree that changes in the tax code are much more likely to make munis less attractive than anything on immigration policy. But I am doubtful there will be any significant tax reform any time soon, especially if healthcare is the priority, and it will be corporate-focused when it comes.

User avatar
Dragline
Posts: 4443
Joined: Wed Aug 24, 2011 1:50 am

Re: Trump is president...how can we make money?

Post by Dragline » Mon Mar 06, 2017 1:03 pm

If this accurately reflects the data and actions of individual investors, it would suggest that we are nearing a top in the stock market sometime in the next year or so:

http://www.marketwatch.com/story/trump- ... 2017-03-06

User avatar
Chad
Posts: 3850
Joined: Fri Jul 23, 2010 3:10 pm

Re: Trump is president...how can we make money?

Post by Chad » Mon Mar 06, 2017 1:45 pm

Yeah, probably about a year or so, right after healthcare reform, tax reform, or infrastructure spending plans disappoint. One of those will definitely fall short of the current overly optimistic view.

Retail investors appear to be jumping in now. The Today show had a segment with a nice market topping title: "Cashing in on a Hot Stock Market"

https://twitter.com/awealthofcs/status/ ... 4875529216

Not a good sign. Next bearish indicator will be a bullish cover of a national non-financial magazine like Time.

I'm being very selective in individual stocks in the US market and using the strong dollar to buy foreign stocks right now, but I haven't sold much of my US holdings, yet.

User avatar
Dragline
Posts: 4443
Joined: Wed Aug 24, 2011 1:50 am

Re: Trump is president...how can we make money?

Post by Dragline » Mon Mar 06, 2017 2:42 pm

Yup, we're getting there. Here's Mike Tyson shilling for a broker:

https://www.youtube.com/watch?v=bO1Kw4q-EcI

User avatar
Chad
Posts: 3850
Joined: Fri Jul 23, 2010 3:10 pm

Re: Trump is president...how can we make money?

Post by Chad » Mon Mar 06, 2017 6:35 pm

That is probably aimed at retail investors, as no one is hiring Tyson to convince professionals to use their brokerage.

User avatar
cmonkey
Posts: 1484
Joined: Mon Apr 21, 2014 11:56 am

Re: Trump is president...how can we make money?

Post by cmonkey » Fri Apr 21, 2017 11:22 am

Instead of the trump trade, now we have the o'reilly trade.

User avatar
bigato
Posts: 1526
Joined: Sat Mar 05, 2011 12:43 pm

Re: Trump is president...how can we make money?

Post by bigato » Tue Apr 25, 2017 5:35 pm

Considering the movements near North Corea and Trump's personality, is anybody considering buying a sizable chunk of gold just about now?

ThisDinosaur
Posts: 574
Joined: Fri Jul 17, 2015 9:31 am

Re: Trump is president...how can we make money?

Post by ThisDinosaur » Wed Apr 26, 2017 7:42 am

Considering? Yes. I've also been planning on buying some EWY (south korea etf), but it has jumped up in price recently. Maybe because other "contrarians" are betting this will blow over.

User avatar
Dragline
Posts: 4443
Joined: Wed Aug 24, 2011 1:50 am

Re: Trump is president...how can we make money?

Post by Dragline » Wed Apr 26, 2017 8:12 am

Have some. Will buy a little more if it goes down, but will start selling if it spikes upward.

IlliniDave
Posts: 1675
Joined: Wed Apr 02, 2014 7:46 pm

Re: Trump is president...how can we make money?

Post by IlliniDave » Wed Apr 26, 2017 8:31 am

No meaningful consideration here. Being 765 days or less from yanking the yellow-and-black handle I am starting to mull over options for positioning myself a little more defensively in the future, and thoughts of PP-style strategies come up on occasion (although that sort of move is still quite unlikely for me). I don't think I'd ever buy gold based on news headlines, even when they involve DT and the loose cannon in N Korea.

Post Reply