Breaking news - Trump victory has no effect on markets
Ok so last week I posted an article comparing the 2016 election to Brexit and giving advice on how to position yourself accordingly if the markets acted a certain way. Looks like Donald Trump won the 2016 election - which left quite a few people shocked and I won't go into the finer points of the phenomena. I had predicted that if Donald won, there would likely be an effect on the market and that we should be ready to pounce in the event of a crash. At least that is the type of thinking I was trying to impart last week in my article. It appears that the election has had little or no effect on the markets. If anything they are higher than before.
Because of this lack of a drop I would not invest any more than I usually would on any given day. If I were using a dollar cost averaging technique I may even be investing slightly less than normal. This is all interesting but you should be asking "well DDave what should I invest in now?" Of course have read my article about big bears and have an egg ready to drop at a moments notice.
What happens when that egg gets to big? You can't sit on it forever and wait for it to hatch, its really not that kind of mentality that will get you ahead. Here is what I would be investing in right now if I were you:
- Build a rainy day fund of 6 months of pay (or to cover 6 months of expenses.) Maybe more if your employment is perceived as unstable or at risk.
- Build a separate capitol repository where you can have something ready to deploy at a moments notice in case we run into another big bear or you see a killer deal somewhere.
- Continue your normally scheduled 401k investment to lower your tax liability.
- Begin to wrap your head around the differences in how much you earn vs how much you save. A critical concept if you want to get ahead. If you don't want to think about it too hard then just try to be thrifty and get as many legal tax write offs as you can.
If you have already done everything listed above, then I really don't have to tell you where to invest because you are one smart cookie already! But here are some options anyways:
- Start a betterment account! Get your feet wet in stocks and bonds. Invest every month and use dollar cost averaging.
- Look for real estate to invest in. The writeoffs from either a primary residence or better yet a rental property will take you into Bernie Sanders' super low tax bracket in no time.
And don't forget - have a great week!