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Post-Election Stock Price Rise Gives Investors Mixed Feelings

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This week’s Sentiment Survey special question asked AAII members what they thought about the post-election rise in stock prices. Responses were mixed. The largest group, nearly 38% of all respondents, think prices are rising on expectation of the changes President-elect Donald Trump will bring. The easing of business regulations and lower taxes were specifically mentioned. Slightly less than a quarter of all respondents (22%) think the rally is temporary, with a reversal potentially occurring during the first half of next year. Nearly 14% think stocks have either risen too far too fast or do not believe the rally is justified by the current underlying fundamentals. Other respondents described the rally as a reaction to the uncertainty about the election being over, are taking a wait-and-see approach or say they are surprised by the rally.

Here is a sampling of the responses:

  • “The market likes the idea of a Republican-controlled government. Less regulation and less business taxes.”
  • “A temporary boost due to the election of a market-friendly president. I see a downside to the market in the new year.”
  • “Fleeting as there are not solid fundamentals to support run-up.”
  • “People are optimistic about the economy and possible tax cuts.”
  • “I think it’s a relief that the uncertainty is over.”

Want to weigh in? Take the survey yourself and see results online at http://www.aaii.com/sentimentsurvey.

If you want to become an effective manager of your own assets and achieve your financial goals, consider a risk-free 30-day Trial AAII Membership.

 

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