Optimism after Trump win fades … the rising costs for everything … a way to keep winning

The market optimism spurred by Trump’s election is already starting to fade.

Investors greeted Trump’s election victory, as well as the sweep of Congress, with enthusiasm. Promises about deregulation, pro-business policies and tax cuts made investors anxious to get into market gains early.

The exuberance is waning as folks remember we still have a lot unresolved.

The across-the-board tariffs Trump promised are potentially inflationary. The geopolitical environment seems to be getting more unstable.

Plus, the market is expensive. The forward price to earnings ratio for the S&P right now is sitting at 23.88. That’s not the highest it has ever been, but it’s certainly not cheap.

Recent data from the American Association of Individual Investors (AAII) supports the bearish turn. If you’re not familiar, every week AAII, an association of mostly retail investors, asks its members a simple question: Are you bullish, neutral or bearish?

Here are the highlights from their latest data, released Thursday:

• Bullish sentiment, expectations that stock prices will rise over the next six months, decreased 8.6 percentage points to 41.3%.
• Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 3.7 percentage points to 25.5%.
• Bearish sentiment, expectations that stock prices will fall over the next six months, increased 4.9 percentage points to 33.2%.
• Bearish sentiment is above its historical average of 31.0% for the first time in 10 weeks.

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The Cost of Everything

Adding to the unease may be that everyday expenses haven’t stopped rising.

For example, you might have seen the photo of President-elect Trump enjoying McDonald’s with Elon Musk, J.D. Vance and Robert F. Kennedy, Jr. The picture reminded me that the cost of a McDonald’s cheeseburger has risen 150% since 2019.

Holiday shoppers are feeling the pinch too. According to pickyourownchristmastree.com, the median cost of a real Christmas tree was $76 in 2019. By 2022, that cost had risen to $93. Costs went up another 10% in 2023 and increases of 5% to 15% are expected this year.

Playing Offense in an Expensive Market

I hope you’ve been able to take advantage of the bull market the last two years. As I write Friday morning, the S&P 500 is up 24% for the year.

If the current gains hold through the end of the year, 2024 will close with gains of more than 20%. And since 2023 finished with gains of 26%, this would be the first time the S&P 500 will have had gains of more than 20% in consecutive years since 1998 and 1999. The chart below shows the S&P’s gains since January 2023.

If you’ve been invested during the last two years, these gains might at least help ease the sting of a more expensive hamburger, or Christmas tree.

But there are other ways to extract cash from the market without waiting for two years. In fact, in some cases you don’t have to wait more than two days. And it doesn’t always require taking extreme risks.

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A Method for Quick Gains

Regular Digest readers are familiar with Jonathan Rose, the analyst behind our Masters in Trading franchise. For newer readers, Jonathan’s credentials are impressive.

He was a professional trader for more than 16 years and traded in the pits on some of the biggest exchanges in the world, such as the Chicago Mercantile Exchange and the Chicago Board Options Exchange.

He earned millions in the market before turning his attention to mentoring others. He has trained more than 100 professional traders. Now, in his Masters in Tradingfranchise, he helps teach retail investors how to trade the markets for profits while effectively managing risk.

On Tuesday at 11 a.m., at the One-Day Winners Summit, Jonathan is going to host a live demonstration of his new five-step strategy that can deliver triple-digit gains in just a few days – and it only takes two tickers to get started.

During the session, he’ll reveal the results of a months-long beta test and demonstrate the tools he uses to detect when the conditions are just right for executing these trades … and he’ll be doing it all live! You can sign up here to reserve your spot for the One-Day Winners Summit.

The holiday season means a lot of good cheer – and a lot of spending. It can be a stark reminder that everything in our lives is more expensive than it was four years ago.

Whether Trump’s policies bring prices down remains to be seen. In the meantime, you owe it to yourself and your financial goals to learn how to trade and get the most profits from the market without waiting months or years for a meaningful return.

You can start Tuesday at 11 a.m. at the One-Day Winners Live Summit. It’s free to attend and you can sign up here to reserve your spot.

Enjoy your weekend,

Luis Hernandez
Editor in Chief, InvestorPlace