Folks, I don't like "talking politics" when it comes to investing...
After all, there's a big difference between promises... and outcomes.
It doesn't matter what side of the political aisle you're on. We all know that politicians don't deliver on most of their promises.
And often the things they do accomplish end up watered down. That's just how the system works.
Despite that, President Donald Trump's promises are big. They're generationally defining.
Just imagine if he could snap his fingers and get Canada and Greenland to become part of the U.S. already. That's a massive change.
The tariff decisions are big, too. They're redefining America's relationships with its allies.
In fact, later today, Trump is expected to make more announcements on tariffs. He has been billing it as a "Liberation Day."
And I expect nothing short of a substantially grand plan. That's his style.
But there's no question this is making a mess of the markets. Uncertainty and fear have taken over.
To many folks, it feels like nothing is a sure thing when it comes to America's policies. And accordingly, the market has been chaotic.
Now, most are investors wondering, "What's next?" Well, history might give us a hint...
The Big Government Shutdown Had Plenty of Fear Priced In
Let me be clear... I don't pretend to see the future. But I am a data guy.
Today's problems may be unprecedented to some degree. Still, America and the markets have been through a lot of political brinksmanship.
Think about it. How many times have we come close to – or actually had – a government shutdown in the past decade?
I bet it's enough that you've lost count. But when one happens, it's a serious event for America.
Despite that, I bet you haven't thought about the 2018 to 2019 shutdown in some time. After all, it seems like a distant memory today.
But it was a darn big deal at the time...
Political brinksmanship came to a head. And on December 22, 2018, the federal government "shut down." Of course, that happened all while politicians blamed each other and tried to control the optics of it.
At the time, Fitch Ratings even said it could consider downgrading America's credit rating.
But looking back at the chart of the S&P 500 Index from that time reveals something interesting...
Again, the shutdown started on December 22, 2018.
Of course, nobody knew how long it would last. And news about the "impending doom" had already filled headlines for weeks before the shutdown started. So it's no wonder that the markets moved lower leading up to it.
But look at what happened as the shutdown dragged on... The market moved higher.
Investors had already priced in most of their fear – even though the shutdown ended up lasting a record 35 days.
And 2019 turned out to be a massive year in the markets. The S&P 500 soared nearly 29%.
Market Downturns Also Create Opportunities
Now, I don't pretend to know exactly how today's events will play out. But recently, investor sentiment has been about as terrible as it gets.
Could the broad market fall further from here? Sure. There's a lot of new information coming out of the White House that investors are still trying to price in.
But history tells us that these "market ending" events don't always play out like investors expect. And a bit of common sense tells us that's likely to be the case today, too.
Brinksmanship creates a lot of uncertainty. And it does punish the markets.
But as we've discussed plenty of times here at the Chaikin PowerFeed recently, market pullbacks and corrections also create investing opportunities.
So, no matter how you feel about today's politics. I recommend you keep an eye on the markets. And don't run for the hills just yet.
There are lot of opportunities in the making.
Good investing,
Vic Lederman
P.S. In fact, when it comes to opportunities, you won't want to miss the latest big news from Marc Chaikin...
In short, he revealed a breakthrough stock strategy on camera. It's designed not only to protect your money during these chaotic moments... but could potentially double your portfolio – even if the market crashes further from here.
If you missed Marc's broadcast, you're in luck. We've made a replay available. And it's free to watch. Check it out right here.
