Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
Trump Slams Fed Again, Says Stocks Should Be 5,000-10,000 Higher
You put it best in your 2nd sentence...."Delusions of grandeur". Explains Trump's narcissistic world. He will blame the Fed (along with Obama and Hillary) after he loses in 2020.
To grow an economy, you make sure that it has a good labor force that is well educated (or well trained for jobs), that is not growing disproportionately old, and that brings a wealth of ideas and zeal. The stock prices will follow.
“Trump Slams Fed Again, Says Stocks Should Be 5,000-10,000 Higher”
I don’t think it’s healthy or helpful to be obsessively fixated on the stock market all the time and worring about where the Dow is - or trying to foresee where it will be six months from now. Invest in good companies or funds for the long term. Keep risk appropriate for your age and circumstances. The rest will take care of itself. I agree with @MJG on that point. Donnie needs to tune out CNBC and get on with his life. The markets will do what they will do.
As for the broader picture, not enough Americans own much of anything. And some don’t bother to vote either. My guess is the Prez feels that among the voting electorate this emphasis on markets may have some positive effect. If he holds his base at 35-40%, than he needs to move just 10% of the independent / undecided vote in his direction.
"Donnie needs to tune out CNBC and get on with his life."
Donnie needs the markets to rally to have a chance at re-election. That's the game he's playing. He wants to be puppetmaster - he wants to control the Fed. If they did raise rates again, this artificial stock market will revert to less exuberant levels. Donnie's 2020 CAMPAIGN can't handle that.
Right or wrong, the public ties market (and economic) performance to the current President in office. Its all about perception.
Donnie's insecurities show through with his attempts at Fed manipulation. If the US stock market falls, then in his mind, the public will turn on him. He may be half right for once, at least on that point.
Agree it’s much more complex than my answer suggests. I don’t disagree with you. I was just trying to look at this more from an investing perspective, since that’s what we attempt to do here. I’ve seen board members get real worked up over things like whether one should watch the business channels at all or check their holdings more than a couple times a year. Than this xxxx comes out screaming mad because the Dow is 10,000 points lower than he wants it to be. What an example to set for those of us who study the art of investing regularly and try to abide by certain wise precepts.
The Dow (to which he was likely referring) is one of many indexes contrived by market watchers to represent the broad worth of certain underlying assets. There are only 30 stocks in the Dow. Yet the Prez wants to fixate on it. John Bogle always said that the Wilshire 5,000 (W5000) was the index to invest in. I’d agree it’s a better barometer of U.S. business health than the Dow. In the end, the health and viability of the underlying businesses determines what level the Dow or any other index reaches. The market’s not a casino. It’s a reflection of the health of business.
Can markets get distorted, over-elevated or over-hyped? Sure. But that kind of market “high” is not beneficial in the long run. Stoking markets artificially higher by rate cuts than what the underlying fundamentals would normally dictate can actually cause a lot of harm longer term. And it’s usually the small investor who gets burned the worst when things eventually turn down. There are other trade offs as well. Do you want Dow 25,000 with gasoline at $15? Or maybe 15% mortgage rates at the same time? So the Dow 30 is an awfully small slice of the economy on which to fixate.
Comments
He will blame the Fed (along with Obama and Hillary) after he loses in 2020.
Derf
Can Putin bail him out again?
I don’t think it’s healthy or helpful to be obsessively fixated on the stock market all the time and worring about where the Dow is - or trying to foresee where it will be six months from now. Invest in good companies or funds for the long term. Keep risk appropriate for your age and circumstances. The rest will take care of itself. I agree with @MJG on that point. Donnie needs to tune out CNBC and get on with his life. The markets will do what they will do.
As for the broader picture, not enough Americans own much of anything. And some don’t bother to vote either. My guess is the Prez feels that among the voting electorate this emphasis on markets may have some positive effect. If he holds his base at 35-40%, than he needs to move just 10% of the independent / undecided vote in his direction.
Donnie needs the markets to rally to have a chance at re-election. That's the game he's playing. He wants to be puppetmaster - he wants to control the Fed. If they did raise rates again, this artificial stock market will revert to less exuberant levels. Donnie's 2020 CAMPAIGN can't handle that.
Right or wrong, the public ties market (and economic) performance to the current President in office. Its all about perception.
Donnie's insecurities show through with his attempts at Fed manipulation. If the US stock market falls, then in his mind, the public will turn on him. He may be half right for once, at least on that point.
You noted: " get on with his life." Knowing you know, he considers himself Omni whatever.
Agree it’s much more complex than my answer suggests. I don’t disagree with you. I was just trying to look at this more from an investing perspective, since that’s what we attempt to do here. I’ve seen board members get real worked up over things like whether one should watch the business channels at all or check their holdings more than a couple times a year. Than this xxxx comes out screaming mad because the Dow is 10,000 points lower than he wants it to be. What an example to set for those of us who study the art of investing regularly and try to abide by certain wise precepts.
The Dow (to which he was likely referring) is one of many indexes contrived by market watchers to represent the broad worth of certain underlying assets. There are only 30 stocks in the Dow. Yet the Prez wants to fixate on it. John Bogle always said that the Wilshire 5,000 (W5000) was the index to invest in. I’d agree it’s a better barometer of U.S. business health than the Dow. In the end, the health and viability of the underlying businesses determines what level the Dow or any other index reaches. The market’s not a casino. It’s a reflection of the health of business.
Can markets get distorted, over-elevated or over-hyped? Sure. But that kind of market “high” is not beneficial in the long run. Stoking markets artificially higher by rate cuts than what the underlying fundamentals would normally dictate can actually cause a lot of harm longer term. And it’s usually the small investor who gets burned the worst when things eventually turn down. There are other trade offs as well. Do you want Dow 25,000 with gasoline at $15? Or maybe 15% mortgage rates at the same time? So the Dow 30 is an awfully small slice of the economy on which to fixate.