Donald Trump is starting his first full week as U.S. president. Bearish investors have been out in full force, proclaiming, with high confidence, that it’s time to sell stocks. At the same time, bullish gurus are saying just the opposite.

So who’s right?

Let’s explore the answer. First, we need to develop some concepts through which we can find a sensible conclusion.

The middle road

For those who wish to know what The Arora Report is doing now, I will share with you an annotated chart that shows our actions since the election.

Please click here for the annotated chart.

The Arora Report’s current call is to hold cash or Treasury bills (18%-28% of the portfolio) and short- to medium-term hedges (15%-25%) and very short-term hedges (15%) based on individual risk preference. (The numbers don’t add up to 100% because of the mix of long exposure and hedging.)

The foregoing is derived from our adaptive ZYX Global Multi Asset Allocation Models that automatically changes itself with market conditions.

Bold promises, but can Trump deliver?

Trump has made bold promises. He has talked about achieving 4% growth in gross domestic product, massive deregulation and lower taxes for corporations. To figure out if the bulls or the bears are right, we need to know if Trump can deliver.

The bullish argument

Bullish gurus have put forward a variety of arguments. Most don’t withstand rigorous analytical scrutiny, so I will not address them. Here’s the main bullish argument that carries some weight…Read more at MarketWatch

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