As longtime readers of the blog know, I am a very big fan of index funds for retirement investing. I really like the very boring ones (i.e. Vanguard's S&P 500 fund or its "Total Bond Market Index.") Some international indexing seems wise as well.
Weird question: should the election of President Trump change how I do my long-term investing?
After three weeks of watching the White House and the Republican-controlled Congress approach issues, I have a difficult time imagining that significant economic policy shifts will come about anytime soon. I know the President is considering the renegotiation of NAFTA (that would be a pretty big deal), but it's hard to know how much that would change the long-term trajectory of the US or the world stock markets. I presume that there will be some kind of protracted renegotiation and President Trump will sign something, but it's difficult to know how consequential it could be.*
Here's a list of things that I think could matter to the stock market in the short (4 to 8 year) run:
- A war
- "Spectactular"-level terrorist attacks in the US
- Major monetary policy shifts
- Major trade disputes
- A major natural disaster and poor recovery in a key economic center (San Francisco, New York, etc.)
- Capital controls
*From a long-term (10-20 year) perspective, I could easily imagine some shifts. The United States holds the commanding heights in terms of its academic science and engineering infrastructure, even as it has seen flattish funding over the last ~16 years. I assert the products of that infrastructure is a huge source of future GDP growth. If major, geographically broad immigration restriction occurs (i.e. targeting China and India) over a prolonged period of time, it seems to me that this will have significant effects on academic science and its labor force. What the academic research enterprise in the United States would look like after that kind of challenge to its current labor force mix is an open question.