The Trump Rally Extends as DJIA Taps at 20,000

The Trump Rally Extends as DJIA Taps at 20,000

The Trump Rally Extends as DJIA Taps at 20,000

$DIA, $SPY, $QQQ, $VXX

Jeremy Siegel says stocks are the best long-term investment and the market’s 6% rise since Republican Donald Trump was elected US President is just the beginning of a strong rally.

“I think the Trump rally has a way to run,” Professor Siegel said Monday.

The DJIA is up 13% YTD, putting in on course to be the best year since Y 2014. Financial stocks have led the gainers as investors expect President-elect Donald Trump to repeal or rein in many of the post-crisis financial regulations enacted under lame duck President Barack Hussein Obama.

Professor Siegel explained his Bullish ideas about stocks 22 years ago in a book “Stocks for the Long Run,” which showed that over 200 years, stocks have gained 6.7% a year after adjusted for inflation. That’s better than the 3.6% for US government bonds and 0.6% for Gold.

“There are a lot of bumps along the way,” he said but “stocks are the best long-run asset, clearly performing far better than any major asset class this year.”

He does not see stocks in a bubble, despite Donald Trump’s claims during the campaign that the Fed’s loose monetary policy had made the market too overvalued.

The trailing 12-month PE/R (price-to-earnings ratio) for the S&P 500 has risen to 24X from 23X a year earlier. That’s less than the 30X ratio during the dot-com bubble in Y 1999.

Professor Siegel recommends that investors stick to passive investing strategies that steadily buy stocks during highs and lows aka dollar cost averaging.

“I like index funds a lot,” he said, recommending investors also have a global stock fund. “With two or three funds, you can really cover the world quite well.”

Monday, the US major stock market indexes finished at: DJIA +39.58 at 19796.43, NAS Comp -31.96 at 5412.54, S&P 500 -2.57 at 2256.96

Volume: Trade was heavy, 1.17-B/shares exchanged on the NYSE

  • Russell 2000 +21.5% YTD
  • DJIA +13.6% YTD
  • S&P 500 +10.4% YTD
  • NAS Comp +8.1% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Bullish (0.45) Bullish (0.40) Very Bullish (0.56) Bullish (0.39)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Bullish (0.39) Bullish (0.33) Bullish (0.48) Bullish (0.36)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Bullish (0.36) Bullish (0.31) Bullish (0.38) Bullish (0.39)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Very Bearish (-0.56) Very Bearish (-0.65) Bearish (-0.33) Very Bearish (-0.71)

Stay tuned

The following two tabs change content below.

Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

Latest posts by Paul Ebeling (see all)

You must be logged in to post comments :  
CONNECT WITH