Hi, it’s Dan Witherington from American Wealth Builders.
Today marks the start of week 2 in office for Trump – and if it’s anything like last week be prepared to strap in.
His supporters are celebrating his action-taking. His detractors are condemning his action-taking.
How do you feel about his first week in office?
Here’s one shocking thing that you might not have realized: some of his biggest detractors (including people who showed up at the Women’s March) might actually be HELPING him?
They might not realize it but they might actually be HELPING him.
(And you’ll want to read this because, regardless of whether you support Trump or not, this WILL impact your investment portfolio.)
Let me explain…
One of the most important economic truths is this: Economies are driven by confidence.
So, if you’re wondering what the US economy is going to be like, you need to ask what the average consumer’s confidence level is.
When I say “confidence” I mean: people’s confidence that they will have a job tomorrow. That there will be food on the table. That they can retire at 65. That they can basically afford the things they need in life.
If people think they have these things, they’ll spend money. If people are worried about whether they’ll have a job or food on the table then they’ll hoard money. And when money moves around the economy, that’s a good thing.
So, are people more likely going to hoard their money or spend it?
If they feel confident, great. They’ll spend money and keep the economy moving.
If they don’t feel confident, fine. They’ll hoard money and slow the economy down.
What people may not realize is: it’s only partially related to Trump himself and the decisions me makes in office. He’ll make some decisions that anger and upset his opponents and thrill his supporters. But the bottom line is: how do every individual American feel about whether they’ll have a job tomorrow?
Let me use two examples from polar opposite ends of the spectrum to illustrate:
That Trump supporter who has been working his 9-5 job at the mill his entire life and starts hearing rumors that the mill will shut down.
Or, that Trump detractor who marched in the Women’s March but returned to her home when the weekend was over.
Both of these people can influence the economy in the same way! If they feel that they will each wake up the next day to jobs, they’ll be confident and will more likely spend money today. If they wake up the next day and aren’t sure if they’ll have jobs, they’ll be less confident.
IT DOESN’T MATTER whether they were Trump supporters or not.
(That said, Trump will make decisions in office that could impact the jobs of one group or another but, for the most part, it doesn’t really run along party lines the way many think it does.)
Here’s why this matters to you:
Asking whether people, in general, feel more confident or less confident about the economy will tell you what’s likely going to happen to the economy, and THAT will help you know how to adjust your investment portfolio.
Stocks, for example, tend to go down in a struggling economy, and they tend to go up in a strong economy; real estate values follow along the same lines. So, in a strong economy, you may get a higher price if you sell; and in a weak economy, you may prefer it as a time to buy.
And if you’re a real estate investor like I am, you’ll probably discover a couple of things…
First, rental properties deliver cash flow in good times and bad, so I prefer them no matter what the economy is doing!
Second, you may find that there tend to be more renters and fewer buyers in a weak economy (because it’s harder to get a mortgage). So it’s a good time to acquire real estate and find renters.
At American Wealth Builders, we’re always watching the economy to see how to take advantage of it. If you want to see what properties we have in our portfolio right now (it’s always changing) then get in touch and let’s talk about your investing goals!
- Protestors And Profits - January 30, 2017
- Urban Myths Of Real Estate Investing - December 31, 2016
- Why Investors Are Leaving Mutual Funds For Real Estate - December 24, 2016
- Stop! Read This Before You Make Another Real Estate Investment - December 17, 2016
- A Better Retirement Strategy Than You See On TV - December 9, 2016