Investors need to chill

No matter how miserable the present circumstance may be, human beings fear that change could make matters even worse. Gayly Photo.

If you are feeling like today is the beginning of an American Armageddon, you are not alone. Wall Street, most of the media, and almost all of the country's establishment share your concerns. Those concerns are overblown.

If you are tempted to sell your investments, either as a form of protest or because you genuinely believe that Donald Trump will lead us all into economic perdition, don't do it.  Instead, calm down, take a deep breath and put your thinking cap on.

The election was a Republican sweep. As such, Congress and the White House have the chance to finally begin singing from the same song sheet. Let's face it, for the past eight years government has been a dysfunctional mess. Legislatures have seen their approval ratings sink to historic lows. The economy has been limping along at sub-par growth and no one in Washington, except the Federal Reserve, was lifting a finger to change things.

Readers may recall that time and again I have written that the Fed was at the end of their rope in their efforts to grow the economy. The past two fed chairmen have said as much to Congress, but no one was listening. Now we have a president who understands the problem and is bound and determined to fix it. 

President-elect Trump took the working man's plight as one of his main campaign themes. There are sound economic reasons why he should. Over 70% of the growth in this country is derived from consumer spending. For the past thirty years, the working class has seen their take-home pay dwindle.  Today most of us are making less than our fathers did, despite the fact both spouses must work just to put food on the table. Is it any wonder that spending, our engine of growth, has failed us?

Readers may also recall that income inequality in this country has grown so large that the U.S. ranks last among developed nations in income disparity. No one seemed to think that was important in this presidential campaign but it is key to the future in this country. Given their profit motives, corporations will continue to export jobs overseas until someone makes it uneconomical to do so. That can be reversed by corporate tax policies that either reward or penalize companies for exporting jobs.

It can also be accomplished by renegotiating trade deals that hamstring our workers. The decision by British voters in the United Kingdom to exit the European Union was motivated by many of the same concerns. What good are liberal trade deals when only a minority of mega-companies benefit? As in our own country, the vast majority of jobs and enterprises in Britain are small businesses.

If Trump delivers on even half of his economic promises, the country could experience a spike in growth, better-paying jobs for Americans and a robust stock market. Those are all reasons why any short-term temper-tantrum by Wall Street traders would be a buying opportunity for me.

All of the above does not make me a fan of Trump from a social point of view.  His comments on race and women are deplorable. Whether his inexperience in elected office is a good or bad thing has yet to be determined but I'm willing to give him a chance.

Change is not a comfortable concept for the majority of human beings. No matter how miserable the present circumstance may be, human beings fear that change could make matters even worse. That's just how we are wired, but the facts are that change has been the life blood of this country. Change defines us and always has.  Rather than look at the future under Donald Trump as something to be feared, I say embrace the change. Help shape the future and profit from it.

by Bill Schmick
Special to the Gayly

Prior to joining Wall Street, Bill Schmick was an award-winning journalist. Since then, he has worked in a variety of roles in his 33-plus years in financial markets. None of this commentary is or should be considered investment advice. For individualized investment, contact a qualified investment adviser.

Copyright The Gayly - 11/9/2016 @ 11:48 a.m. CST.