Has your Investment Policy Changed After the US Election

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Re: Has your Investment Policy Changed After the US Election

Post by Shakespeare » 21 Nov 2016 23:53

Is a Trump presidency a game changer?
IMHO no. The US system has a large number of checks and balances. Major changes have to get through Congress. For example, the President can not declare war.

That doesn't mean there won't be changes but AFAIC I'm covered off by simply investing in VT for (largely) ex-Canada purposes.
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Re: Has your Investment Policy Changed After the US Election

Post by AltaRed » 21 Nov 2016 23:55

For sure a Trump presidency is NOT a game changer. No differerent than Brexit, or the financial crisis, the Asian flu crisis, the Russian ruble crisis, or the tech bubble bursting. None of those should be game changers for an IPS. WWII probably would be a game changer, but not the Korean conflict. The point being that a well diversified portfolio, properly re-balanced from time to time, will survive 3-5 year hiccups. They are near term aberrations in a 30-50 year investment cycle.

What can change is asset allocation (and thus risk/volatility) as one ages, but should that not be in your IPS to start with? Should there not be statements that 'crystallize' the direction of the change to, for example, more cash generation, a larger 'floor' in fixed income to withstand a bad 3-5 year storm in retirement, etc?
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Re: Has your Investment Policy Changed After the US Election

Post by 8Toretirement » 23 Nov 2016 16:58

Today I re-evaluated my US posn. I have a global value ETF factor fund through Vanguard that I am let riding. It has over 60% exposure to US value stocks that are currently doing well in this market.
My US Total market fund is up significantly this year so I have reduced this posn. Not planning on placing any new funds in the US due to the speed which the US market is heading up. Taking profits, and rebalancing my portfolio to cover any downside pressure moving forward. More comfortable holding value in this market than the total market.

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Trump Investing.

Post by Thegipper » 05 Dec 2016 14:00

I have redeployed a lot of my investments into USA banks and life insurance companies plus ETFs that target the defence industry. Might have to look at the industrials as well.So far the tech sector has been taking it on the chin since the Trump victory..I have a feeling that the Trump presidency will have a big influence on he markets in 2017. What do you think and say. Have you changed your investment strategy?

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Re: Trump Investing.

Post by Insomniac » 05 Dec 2016 14:24

I answered the question in this thread:
viewtopic.php?f=31&t=119673

Merged topics
ModeratorW

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Re: Has your Investment Policy Changed After the US Election

Post by Thegipper » 06 Dec 2016 09:42

My large tech stocks haven't done well since November7. My positions in USA financials have done quite well. I have moved money into ETFs which target defence stocks. Was thinking big pharma and biotech except ending Obamacare is creating uncertainty. Infrastructure, industrial and material stocks should be positively effected. Momentum is hard to fight once it takes hold.

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Re: Has your Investment Policy Changed After the US Election

Post by Profit not Prophet » 06 Dec 2016 14:34

Here's a story in The Atlantic from last June on Trump.

http://www.theatlantic.com/magazine/arc ... mp/480771/

I think it's difficult to separate politics from investment investment when you a genuine loose cannon in office. What could go wrong with a erratic narcissistic megalomaniac in the later stages of a bull market.

Me, I'm building up my cash. Going from the lower end to the higher end of my range. I think 30% lower is more likely than 30% higher in two years. I think many people will read about Nixon and Andrew Johnson in the coming weeks to get a better sense of what was before with similar characters.

Good luck all :)

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Re: Has your Investment Policy Changed After the US Election

Post by Thegipper » 06 Dec 2016 17:15

Profit not Prophet wrote:Here's a story in The Atlantic from last June on Trump.

http://www.theatlantic.com/magazine/arc ... mp/480771/

I think it's difficult to separate politics from investment investment when you a genuine loose cannon in office. What could go wrong with a erratic narcissistic megalomaniac in the later stages of a bull market.

Me, I'm building up my cash. Going from the lower end to the higher end of my range. I think 30% lower is more likely than 30% higher in two years. I think many people will read about Nixon and Andrew Johnson in the coming weeks to get a better sense of what was before with similar characters.

Good luck all :)
There are policies that will go well with the US market. Much lower corporate taxes, tax free redemption of foreign profits, deregulation, increased infrastructure and defence spending. With his cabinet I can't see him proceeding with some of the foolhardy protectionist policies.

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Re: Has your Investment Policy Changed After the US Election

Post by kcowan » 07 Dec 2016 09:38

Thegipper wrote:tax free redemption of foreign profits,
Could not let that one go by unchallenged! Lower rate but still high enough to discourage more companies to going offshore.
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Re: Has your Investment Policy Changed After the US Election

Post by ghariton » 17 Jan 2017 12:55

Well, the Trump rally in the U.S. stock market seems to have stalled for now. That's not a big surprise, of course. But I do think that we are headed for a lot more volatility as investors try to figure out just exactly what the Trump administration will do,

I think that there's an increased chance of a bear market (drawdown of 20 per cent or more). I personally am not changing any of my holdings, and I'm not recommending that anyone else do so. But I think that this is a good time to reflect on one's risk tolerance, before anything happens. Mental preparedness, in the sense of having imagined myself in an unfavourable position, helps me stay calm when bear markets happen. I throw out the suggestion for others who might find it helpful.

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Re: Has your Investment Policy Changed After the US Election

Post by Shakespeare » 17 Jan 2017 13:27

I'm expecting a bear this year and will keep more cash than normal.
“A wise man should be prepared to abandon his baggage at any time.” -- R.A. Heinlein, The Door Into Summer.

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Re: Has your Investment Policy Changed After the US Election

Post by AltaRed » 17 Jan 2017 15:05

It appears Trump becomes more unstable and random each passing day. Witness the stupid comments about BMW as one recent example (and love Angela's comeback). I see business stalling on any substantial investment commitments until this wacko is caged. I agree volatility will be rampant and the chances of a bear market will increase the longer DJT is allowed to run free.
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Re: Has your Investment Policy Changed After the US Election

Post by rhenderson » 17 Jan 2017 16:22

AltaRed wrote:It appears Trump becomes more unstable and random each passing day. Witness the stupid comments about BMW as one recent example (and love Angela's comeback). I see business stalling on any substantial investment commitments until this wacko is caged. I agree volatility will be rampant and the chances of a bear market will increase the longer DJT is allowed to run free.
"A wacko" :lol:

Have you been following David Baskin's tweets ?

"David Baskin ‏@DavidBaskinBWM · Jan 4

it is unbelievable that financial markets trade at the whim of a crazy guy who happens to be about to become President of the US. Weird shit" :roll: :roll:


https://twitter.com/DavidBaskinBWM

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Re: Has your Investment Policy Changed After the US Election

Post by Profit not Prophet » 17 Jan 2017 16:36

Thanks for the Baskin tweet stuff. Strange days.

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Re: Has your Investment Policy Changed After the US Election

Post by AltaRed » 17 Jan 2017 17:01

David Baskin is a colorful person. Some salty old sailor in him.
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Re: Has your Investment Policy Changed After the US Election

Post by flywaysuzy » 18 Jan 2017 11:12

Volitility :thumbsup: I have more cash on hand but not for any stock market reasons- have been looking for some extra pastureland/woodlot.
suzy

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Re: Has your Investment Policy Changed After the US Election

Post by SQRT » 18 Jan 2017 12:42

ghariton wrote:Well, the Trump rally in the U.S. stock market seems to have stalled for now. That's not a big surprise, of course. But I do think that we are headed for a lot more volatility as investors try to figure out just exactly what the Trump administration will do,

I think that there's an increased chance of a bear market (drawdown of 20 per cent or more). I personally am not changing any of my holdings, and I'm not recommending that anyone else do so. But I think that this is a good time to reflect on one's risk tolerance, before anything happens. Mental preparedness, in the sense of having imagined myself in an unfavourable position, helps me stay calm when bear markets happen. I throw out the suggestion for others who might find it helpful.

George
Agree. Given the excellent results in 2016, a sell off in 2017 doesn't bother me much.

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Re: Has your Investment Policy Changed After the US Election

Post by ghariton » 18 Jan 2017 13:18

Whenever I read a bearish commentary, there's a bullish commentary right around the corner. For example, here's Jamie Dimon, CEO of JP Morgan Chase:
JPMorgan Chase Chairman and CEO Jamie Dimon told CNBC on Wednesday the economy could grow at 3 to 4 percent this year with the right tax and regulatory reforms from President-elect Donald Trump.
And that, in turn, could boost the stock market even further, Dimon said on "Squawk on the Street" at the World Economic Forum in Davos, Switzerland.

The Dow Jones industrial average, as of Tuesday's close, has increased about 8.5 percent since Election Day.
Of course, this is the same Jamie Dimon who was caught off guard by the 2008 financial crisis. Still, by and large he is a lot more knowledgeable about financial matters than I am.

Buy and hold... Design a portfolio that will let you sleep in good times and bad. Then leave it alone.

I think I'll go lie down for a while.

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Re: Has your Investment Policy Changed After the US Election

Post by AltaRed » 18 Jan 2017 13:26

Still, it pays to 'brace oneself' for a flat, or down, year. It might be a cold shower after 2016, but remember 2015 didn't do much of anything either. Best to condition oneself to 'staying the course' accordingly.
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Re: Has your Investment Policy Changed After the US Election

Post by kcowan » 18 Jan 2017 15:47

ghariton wrote:I think I'll go lie down for a while.

George
I am going to use my 20% cash buffer as a blanket and avoid TV on Friday!
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Re: Has your Investment Policy Changed After the US Election

Post by zeno » 19 Jan 2017 10:10

My investment policy almost changed, then didn't... then did?

The one change I was going to make this year was to switch more of my US Equity ETFs to unhedged funds. I had been doing this gradually with new contributions anyway, but with Trump threatening trade barriers I was going to actively sell my ancient XSP holdings and buy XUS (or VTI). Then Trump started talking down the US dollar and the Canadian dollar went on a tear. Next the Canadian dollar got Polozed and I realized I was reading too much financial news. I'll continue to reduce my hedged holdings during natural rebalancing and new purchases rather than a single one time swap.

I too believe that a correction is coming, but it was always coming, Trump or not. If someone can confirm the year of this crash (Quarter would be good too. Don't worry about greater accuracy) I would build up some cash reserves for that point. The trouble is we don't know if the correction is in 2017 or in later years. Did Trump's arrival extend this long bull or hasten its end? I don't know.

In the end I ended up staying the course, by the initially turning myself around in circles.

A couple of factors are relevant. My asset allocation is already quite conservative (35-40% fixed income). It's an allocation that allowed me to go through the 2008 crisis reasonably calmly, so I'll count on it to weather the Trump crisis too. I'm also in a hyper-accumulation phase - last decade of work, significant yearly additions to my portfolio, so that affects my thinking. There's new money coming for the next four years to buy on dips. I might think differently if I was in a withdrawal phase.

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Re: Has your Investment Policy Changed After the US Election

Post by ghariton » 19 Jan 2017 13:11

zeno wrote:In the end I ended up staying the course, by the initially turning myself around in circles.
That would be me too.

I find that, when I feel that I must absolutely do something, lying down until the feeling passes is very helpful.

George
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Re: Has your Investment Policy Changed After the US Election

Post by deaddog » 19 Jan 2017 14:34

I continue to let the trend of the market influence my investment decisions.

So far the trend is up and I remain almost fully invested in individual equities.
Most of our so-called reasoning consists of finding arguments for going on believing as we already do.( J.H. Robinson)

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Re: Has your Investment Policy Changed After the US Election

Post by kcowan » 19 Jan 2017 14:58

I made some major buys into banks (TD, RY and NA) and telecom (BCE and T) but I kept 20% cash available for investment. I also have 12% in expiring bonds and convertibles that can be reinvested as they mature.

My IPS has evolved to more dividend-paying equities and less capital appreciation.
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Re: Has your Investment Policy Changed After the US Election

Post by AltaRed » 19 Jan 2017 16:07

A random thought for those that just cannot 'do nothing' as this gong show unfolds. It has been said (yesterday) that NAFTA is top priority for DJT and he includes Canada in his comments. He obviously does not understand that the trade deficit is in 'his favour' but I doubt it will stop him from intimidating to see what else he can possibly secure. A couple of things at risk could be:

1) our supply management exclusions. I wouldn't shed a tear over them provided we get something in return.

2) import tariffs on targeted goods (but not services). There is a whole menu of things one could think of here but much loss in trade (volume) will hurt the rails and trucking firms.

3) He might well place a laddered import tariff on oil in order to shore up and accelerate O&G production stateside to become self-sufficient. I say tiered because a major step change would hurt US profitability with 'artificially high' prices in the USA versus elsewhere, but a stepped increase over 4-5 years would be doable. That hurts our oils and our pipelines and eventually could strand almost all movement of O&G to the USA.

So...for those with trigger happy 'sell' fingers, those are some possible things to fret about.
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