The simple fact is that just about anything with a dividend or current yield of any kind will rally when interest rates are on the decline.
It is like shooting fish in a barrel to be frank. For the past 10 years, this was the case for 90% of income-bearing assets until the November election of 2016, when the bond market determined that the great rally in bonds officially was over.
Regardless of the fact that the Trump agenda has all but been thwarted at every turn, there already was well-seeded momentum for the domestic economy that was going to show up in the data no matter who won the election. The extra jolt of optimism garnered by the Trump win and the promises tax reform, health care reform, immigration reform, infrastructure spending and financial deregulation was like pure oxygen being pumped into the ballroom hosting a late-night party.
However, let me go out on a limb and make a few observations about why the bull market will prevail with or without any Trump initiatives becoming enacted policy. We are currently 10 months into Trumpâ??s administration and there is yet to be one single piece of game-changing legislation passed. In addition, the pending passage of tax reform looks like it may extend into 2018. At least, thatâ??s how I see it.
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