How long can these early gains last?

Founder and Publisher of the Switzer Report
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In case you missed it, though you probably haven’t, this has been a great start to a stock market year, after a ripper of a one in 2019. The gain since the start of 2020 is 5.7% and the question many of you have to be asking is: “How long can this last?”

Since the middle of last year, I was telling you (our Switzer Report subscribers) and our financial planning clients that I was prepared to back stocks on the basis that President Donald Trump needed a trade deal before the November election this year. The pressure of this impeachment for Mr Trump, and its possible bad election effects, means keeping his Wall Street customers satisfied is crucial. In a sense, he needs a bridge over troubled political waters, and a rising stock market and improving economy constitute the strongest political bridges he can make or mend before the end-of-year poll.

That said, I expected an eventual sell off and therefore I talked about being more defensive going into March or April on the basis that US electioneering could easily unsettle markets. Of course, this is speculation but it’s wise to remember the old market maxim: “Sell in May and go away, come back on St. Leger’s Day.”

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