You may or may not recall where you were on Dec. 19, 1998. But it certainly ranks as one of the more important events in U.S. presidential history.
That was the day the Republican-controlled U.S. House of Representatives voted to impeach President Bill Clinton on counts of perjury and obstruction of justice.
Here’s why I’m bringing all this up today.
President Donald Trump said yesterday morning that if he were to be impeached – as many of his opponents hope – the stock market would “crash.”
While I support most of the president’s economic agenda, I think his claim here is garbage.
In fact, when I appeared later that day as a guest on Cavuto: Coast to Coast on Fox Business, I quickly swatted it down.
“I don’t see the threat of impeachment or actual impeachment if it were to occur causing, certainly not a bear market,” I told host Neil Cavuto yesterday. “I doubt if it would even cause a correction.”
With that in mind, today I’m going to show you how, even if Trump were ousted, you can still make a lot of money in the markets.
Take a look…
“A Very Different Time”
Let me be clear on this. I just don’t see anything on the economic horizon that would cause the kind of distress we saw when former President Richard Nixon resigned in August 1973.
The differences between then and now are stark and profound.
- At the time, we were at the tail end of the Vietnam War.
- We’d been slammed by the Arab oil embargo that left some drivers waiting up to two hours in gas lines.
- Inflation was through the roof.
- And the economy was in the doldrums.
It was a very different time in 1998, when Clinton was impeached.
Then as now, we were in the middle of an economic boom. Plus, the markets knew that Clinton would never be removed from office by the Democrat-controlled U.S. Senate.
And the markets took it all in stride. The S&P 500 sold off that summer but, after hitting bottom Oct. 5, rallied to gain nearly 30% by the end of the year to close at a new high of 1,231.
We certainly did not go into a bear market. In fact, if you look at the charts from then to today, Clinton’s impeachment barely made a blip.
Ironically, the whole conversation about a possible impeachment came just one day after the S&P 500 made history with the longest bull market on record.
That’s one of the reasons why Trump finds himself in a much better position in terms of the economy than even Clinton did. After several years of mediocre GDP growth, the economy is now expanding at a 4.1% rate.
Unemployment now stands at 3.9%, the lowest in decades. There are more unfilled jobs than there are laid-off workers.
The president may also be turning the corner on trade with reports that both Mexico and Europe want to provide the United States with better terms.
Consumer confidence has softened a bit in the last few weeks but remains near 14-year highs. Retail sales in July rose by 6.4% from a year earlier.
From a trade and earnings perspective, firms throughout the economy are benefiting from the recent Trump tax cuts. These are padding the bottom line for companies and making them more competitive on the global stage.
It’s one of the reasons why S&P 500 firms are on pace to have grown second-quarter earnings between 20% and 25%.
Bottom line, as I told Cavuto, “If you get outside the Beltway… you’re looking at a backdrop where [Trump] has all the momentum in his favor… business optimism is also very high.”
It’s Not Going to Happen
Now, impeaching Trump is no slam dunk.
First of all, impeachment talk is gaining new momentum after the president’s former personal lawyer, Michael Cohen, pled guilty a few days ago to eight federal crimes and said some of them he committed at Trump’s behest.
Given all that, the Democrats must still win back the House and do so with a solid majority. Let’s assume they pull that off and proceed with impeachment. Odds are the Senate won’t convict Trump and remove him from office – not with the two-thirds super majority required to do so.
Even if Trump were removed, Vice President Mike Pence would continue the president’s economic agenda.
Now you know why I remain so optimistic about the market’s ability to absorb a possible Trump impeachment. Yes, we could have a selloff.
But we’d quickly resume a new rally, just as we saw following Clinton’s impeachment.
A Generational Bull Market
In fact, I still firmly believe we are only about halfway into a Generational Bull Market that will last a total of 18 to 20 years.
And I remain particularly bullish on the importance of investing in tech, which has been the biggest driver of stock market gains during the current bull market.
You don’t have to look far for the empirical data. Consider that in just the last three months alone, the tech-centric Nasdaq Composite is up nearly 7%. That’s nearly double the return for the Dow Jones Industrial Average, and 40% better than the S&P.
The long term is even better. Since the bull market began in March 2009, the Nasdaq is up 521.5%, crushing the S&P by nearly 62%.
It’s all because of a broad driver you and I have been talking about for years now – the impact of the Convergence Economy. That’s the growing interrelationships between various sectors of the economy that are now completely dependent on high tech.
Fact is, tech is permeating every single aspect of our lives: how we drive our cars, watch TV, listen to music, surf the web, shop for goods and services, and even use apps and wearables to get a good night’s sleep.
Never in history have we had so many tech devices – from chips to sensors to computer networks and smartphones – driving the economy so aggressively.
In other words, as I have been showing you for some time now, the road to wealth really is paved by tech.
If you want to find out more about Nova-X, just click here. I hope you do.
But either way, I hope you’ll keep coming back here for the tech-investing tips and strategies that can greatly improve your net worth.
See you then.
Cheers and good investing,
Michael A. Robinson