It’s no secret that stocks have been on a ferocious run to the upside since the Presidential election victory by Donald Trump. The notion of looser regulation, tax cuts and massive fiscal stimulus has sent stocks sharply higher, especially banks’.
Could the rally over the last several weeks prove to be a case of buy the rumor sell the fact?
Some analysts appear to think so…
In a recent article from Marketwatch.com, analysts from Morgan Stanley voiced some concerns that the rally in equities has been overdone.
In a note to clients, the bank reportedly wrote: “What increasingly optimistic news are we going to start embedding in our earnings outlooks post-inauguration that hasn’t already been contemplated? A number of stocks are up a lot for which we don’t expect much incrementally positive news for at least the next couple of earnings seasons. So to us, it is WHEN, not IF we should fade this recent reflation trade.”
The analysts went on to discuss stock multiples, and added “We can’t help but think that the Republican sweep has created a more uncertain and volatile outlook for the economy and corporate earnings growth.”
How soon could the Trump rally potentially come to an end? Some believe it could be the day he takes office.
Markets have risen on high hopes for the economic future, and investors will likely want to see progress quickly made. Stocks could become vulnerable to a significant correction if it appears that key policies discussed in recent months are not able to be implemented, or perhaps not to the extent that markets may be looking for. Even with tax cuts and increased spending, the sustainability of any economic boost also remains questionable.
Stocks have enjoyed a great year and a great run over the last several years. The current bull market is aging rapidly, however, and a new incoming administration along with the uncertainty that comes with it could potentially be one of several possible catalysts to put a halt to the multi-year rally.
With the chances of a recession also potentially increasing rapidly, now may be the ideal time to consider some alternative asset classes.
If you are interested in asset classes that can potentially increase in value while possibly providing a meaningful hedge against a number of economic and geopolitical issues, now may be the ideal time to look into physical precious metals such as gold and silver.
Acquiring and holding these precious metals has never been easier than it is today, and current prices could prove to be a significant value for the long-term investor.
Speak with an Advantage Gold account executive today about the potential benefits of physical gold and silver ownership. Our precious metals professionals can answer your questions and can show you how to begin building a precious metals portfolio. We can even show you how to buy and hold physical gold and silver using your IRA account.
Don’t wait for the next major stock market crash before exploring your options. Consider an allocation in physical gold and silver before prices potentially see a substantial multi-year rise. Call us today at 1-800-341-8584 to get started today.Tags: advantage gold, congress, fiscal policy, gold, inauguration, stock market rally, stock multiples, trump rally