^The impact from the election on actively managed funds will primarily be twofold:
Repositioning the portfolio (within your given mandate) to stocks/sectors that are likely to benefit under Trump (e.g. pharma).
B) Flows from retail investors being larger than normal (TBD).
Otherwise, it’s business as usual. Where we’re getting mixed up (or at least I am) is where you say (I think) money coming into a fund today may take a few days to hit the market. That isn’t normally the case. While funds settle at the end of the day, the fund trades the flows as they come in (if they have somewhere to put the money).
Hopefully we will finally get sociopath rights under Trump, I’m sick of the derogatory comments directed at my group. We have made huge contributions to humanity. Also yes, the duplicate/unclear terminology is silly (sociopath, psychopath, antisocial personality).
Hey wait a minute, everything was down when Asia closed, you need to wait for them to reopen, I assume we will see a bounce there too. Regardless, I am long China for the next 20yrs, and opportunistically short SPX along the way. You guys are going down, it’s so clear. And you’re going down from a massively overvalued starting position.
Hells yeah. It’s all about the vol now, and not getting caught on the wrong side of it.
On Monday I shorted Community Health Systems. Also bought Raytheon and CAT. My biggest gainer from Monday purchase Corrections Corp. Should have bought GEO too. My research led me to a Trump win with 310 votes. I was close enough
OK, what I was thinking about fits largely into B, above, and referred to the fact that retail investors (and their advisors who might need authorization from them) didn’t really have time to do anything to move the market on Wednesday. Also, large reallocations don’t usually get traded all at once, right? If PIMCO decides to reduce its duration further, it doesn’t just dump a ton of treasuries and buy a bunch of others all at once, right, it moves them in chunks over the course of a few days, plus maybe a few special techniques, dark pools, internal transfers to other funds, etc. My point being that a lot of these changes take a few days to move through the system, in part because authorizations take time, and in part to avoid excessive market impact transaction costs.
I am not dealing with mutual funds on a daily basis, so the bit about how quickly my individual cash arrives there if I decide to pull the trigger at 11am, was news to me, since all I really register is that I get the end of day Nav per share price as my basis.
But with fixed income in general, rates can’t stay low forever. Remember Trump called Yellen a manipulator, and said the stock market was a bubble (true). Low rates are hurting his followers. If he pumps up rates and crashing the market, he can then “save” the market with an massively irresponsible fiscal stimulus plan.
Personally I am not going anywhere near FI, and staying roughly market neutral on equities. There could be some big a$$ shifts coming, and none of us know what kind of shifts…because Americans “elected” an impulsive psychopath.
Depends on your time horizon, and your opinion of what policies Trump will actually be able to enact… Henry Kaufman seems to think this is just the beginning… see page 3
I always liked Barry Ritholtz’s take on things. Here’s some interesting and potentially useful analysis about lessons from the election relevant to investing.
TLDR version: we’re bad at modeling, probably better just to stay long (unless you exceed your risk tolerance, then lever down).
There may be some crazy drastic moves coming up, just not necessarily the ones discussed during the campaign. These guys have been talking about dealing with the -$200T fiscal gap forever, now they finally have their shot. That’s tricky business.
Same here, I think that’s how a lot of people feel.
I’ve been spending a lot of time reading about special situations investing and am interested in moving to a long-short portfolio. Record market highs probably isn’t a bad time to explore that option.
