The Trump Economy Begins: 3 Moves Investors Should Make After Inauguration Day
Written by
Sean Bryant
Edited by
Amber Barkley
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With President Donald Trump now in office, many investors are nervously awaiting what might be ahead for the stock market. After significant gains post-election day, the S&P 500 has been relatively flat.
While it’s no secret that Trump is pro-business, which can be great news for the stock market, it’s unknown what his policies could mean for investors and, most importantly, what the potential effects of proposed tariffs could be on inflation and the overall economy.
Unfortunately, investors won’t have a clear picture until after policies start going into effect. Until then, it’s wise to protect your portfolio. Here are three moves all investors should make right after Inauguration Day.
Diversify
Diversification is one of the most important strategies for any investor, new or experienced. And with so many unknowns, diversification can help minimize the effects of potential volatility in the stock market as the Trump administration gets started.
“Making sure your investment portfolio has exposure to many different sectors is going to be important,” said Uli Ebensperger, co-founder and CEO of Ziggma. “Ideally, you’ll be invested in companies that are different from each other — for example, technology and consumer staples companies. It’s also important to be invested in companies that might not be as affected by potential tariffs.”
By ensuring that your portfolio includes a variety of companies, you will be in a better position to withstand stock market fluctuations.
Focus on the Long Term
After watching companies like Palantir Technologies gain more than 340% in 2024 or Nvidia gain more than 170%, it’s easy to want to find the quick gains. However, you need to keep a long-term view in mind.
“It can be easy to want to find the easy wins for your investment portfolio,” said Ebensperger. “However, instead of chasing the unknown, focus on the long-term. Invest in companies that have good fundamentals and quality leadership. While you might still experience some volatility, these are the companies that come out ahead during turbulent times.”
Hedge Against Inflation
After the past couple of years, many people don’t want to hear the word “inflation.” Unfortunately, without yet knowing the long-term effects of Trump’s policies, many economists are raising the red flag on the potential impacts.
If the economy experiences another round of inflation, your portfolio must be able to withstand it. Adding real estate, Treasury Inflation-Protected Securities (TIPS) or commodities can help minimize inflationary pressures.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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