While Donald Trump’s election has altered a number of aspects of the economy, investors cannot ignore economic trends that were in place before the election, says Joe McAlinden, founder of McAlinden Research Partners and former chief global strategist with Morgan Stanley Investment Management. In this interview with The Gold Report, he discusses those trends and how they may be changed by Trump’s election, why he is bullish on gold and which sectors he expects to thrive in the Trump era.
The Gold Report: 2017 will be a year of change. In the early days of the Trump administration, what should investors be focusing on?
Joe McAlinden: The important thing investors have to keep in perspective is that this is a market that has had its own trends prior to the surprise election outcome. And while the election outcome has altered a number of aspects for the economy and the markets, there were fundamental forces in place prior to the election that we have to keep in mind.
First, this whole bull market environment that we’ve enjoyed so much since 2009 when the rally began is now almost eight years old. And bull markets on average don’t last that long. So this is a very important point to keep in mind. Stocks have tripled, and you have to begin wondering how much longer it will go on.
An important variable is what’s going on in the fixed income markets. Here we’ve had a multidecade bull market where rates have fallen to historic lows and hit a low point in July and started moving up, I point out again, prior to the election.
Meanwhile, we are in a very advanced bull market for stocks, but I believe it’s being reenergized by the Trump win. We’re in a stage of the business cycle now where …read more