Despite heightened volatility and media negativity, the stock market has delivered strong, above-average returns (16% annualized) during the Trump administration.
Traditional market adages like "Sell in May and go away" have proven ineffective, while new, administration-specific patterns have emerged, such as poor performance in March and on Thursdays.
ETF trading volumes have surged to record highs, indicating increased market "freakouts" and a tendency for investors to use ETFs for rapid repositioning in response to political news.
A new investment theme is emerging around companies with direct government ties or political endorsements, with a proposed "Government Grift" (GRFT) ETF outperforming the S&P 500 in backtests.
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Concerns Raised
Heightened market volatility and frequent "freakouts" driven by political news.
The unpredictable nature of the administration can create sharp, short-term sell-offs.
The potential for new market anomalies to disappear once they become widely known and productized.
Opportunities Identified
Long-term investors have been rewarded for ignoring short-term political noise.
Identifying and trading new seasonal and daily patterns specific to the administration.
Investing in companies that receive direct government investment or political support has been a winning strategy.