My Plan to Get Rich AF Trading & Investing The Election

Summary

This video explores stock market strategies post-election, focusing on potential market movements based on past election trends. It highlights that while presidential outcomes don't drastically affect long-term market growth, short-term changes are influenced by factors like rate cycles and market conditions. The presenter discusses potential trades under different administrations, including treasuries, Bitcoin, Tesla, and smaller oil companies. The overarching theme is that a recession may be imminent by 2025, making now an ideal time for strategic long-term investments in undervalued assets, regardless of the election result.

Takeaways

• 😀 Presidential elections typically trigger market pullbacks, but post-election rallies are common, regardless of who wins.
• 😀 Market conditions in 2024 resemble those of previous election years, with the S&P 500 showing signs of pulling back.
• 😀 A significant market downturn might occur in 2025, driven by a potential recession, though recovery could come swiftly thereafter.
• 😀 The inversion of the 10-year and 3-month treasury yield signals the potential for a recession, particularly when the 10-year exceeds short-term rates.
• 😀 Treasury bond yields are expected to increase in the near term, with a possible sharp drop if a recession materializes post-2025.
• 😀 A Trump presidency could boost smaller oil companies like Devon Energy and Occidental Petroleum due to increased drilling opportunities.
• 😀 Bitcoin's market performance is expected to surge if Trump wins the 2024 election but could dip initially if Kamala Harris wins.
• 😀 Tesla's stock might rally under Trump, whereas under a Kamala presidency, it could experience more volatility or a short-term decline.
• 😀 Google could benefit from Kamala Harris' ties to the company, potentially seeing a rise in stock price, but faces regulatory risks under Trump.
• 😀 Despite political leadership changes, long-term investors should focus on market fundamentals and be prepared for future market dips, especially to capitalize on post-recession rallies.

Q & A

What is the main economic indicator discussed in the video that suggests a potential recession in 2025?

The main economic indicator discussed is the inversion of the yield curve, specifically the 10-year and 3-month U.S. Treasury yields. The speaker believes that once the 10-year yield surpasses all short-term yields, including the 3-month, a recession will likely follow.

How does the yield curve inversion relate to recession predictions?

Historically, an inversion of the yield curve, where long-term rates (like the 10-year Treasury yield) are lower than short-term rates, signals economic instability and often precedes a recession. The speaker argues that a full inversion, where the 10-year yield is higher than all short-term yields, is a key sign of an impending economic slowdown.

What is the speaker’s stance on the 2024 presidential election and its effect on the economy?

The speaker suggests that the outcome of the 2024 presidential election may not have as significant an impact on the economy as many believe. Regardless of who wins, the focus should be on broader economic factors such as Federal Reserve policies and market valuations.

How does the speaker expect small U.S. oil companies to perform under a Trump presidency?

The speaker expects small U.S. oil companies to benefit from a Trump presidency due to less regulation and a pro-drilling stance. Companies like Devon Energy and Occidental Petroleum are seen as good candidates for growth in this scenario.

Why does the speaker believe Bitcoin could perform better under a Trump presidency?

The speaker believes that under a Trump presidency, the regulatory environment for cryptocurrencies like Bitcoin would be more favorable, potentially leading to a rally in Bitcoin prices.

What investment strategy does the speaker recommend for those anticipating a recession in 2025?

The speaker recommends preparing for a potential recession by focusing on bond ETFs like TLT, which could benefit from falling interest rates, and positioning for long-term growth by purchasing undervalued tech stocks like Nvidia or Microsoft after a market downturn.

What role does monetary policy play in the speaker’s market outlook?

Monetary policy, particularly the actions of the Federal Reserve (such as interest rate cuts), is seen as a critical factor for the market outlook. If the Fed cuts rates in response to a weakening economy, this could lead to a rally in bonds and help stimulate the broader market.

What are the risks of investing in Tesla under a Kamala Harris presidency?

Under a Kamala Harris presidency, the speaker suggests that Tesla could face headwinds, particularly with regulatory pressures and potential changes in the economic environment. This could lead to a pullback in Tesla’s stock price in the short term.

What is the speaker’s long-term view on investing in Google?

The speaker is generally optimistic about Google’s long-term prospects, especially if Kamala Harris wins the election, as she might provide a more stable regulatory environment for big tech. However, if Trump wins, there may be increased volatility due to anti-trust concerns.

What does the speaker believe about the overall market during presidential election years?

The speaker believes that presidential election years are typically bullish for the market in the long run, but in the short term, the uncertainty and external factors (like the yield curve inversion and potential recession) can create significant volatility.