Jim Rogers On Why The Return Of Trump Is Beneficial For The Market

The flag of United States of America pinned on the map. Horizontal orientation. Macro photography.

In the upcoming November 2020 election, Donald Trump is up against Democratic nominee Joe Biden. Due to the pandemic, the market has already been in a state of flux, and investors are worried that the uncertainties of the election will further push it towards a downslope.

Jim Rogers, one of the biggest investment gurus in the world, sheds some light of hope in these trying times. According to him, Donald Trump stands a chance to win a second term at the office. He thinks that the markets are going to react positively if that happens. Roger also expressed a strong interest in buying gold and silver because he thinks these commodities will reach record high prices post-election.

Market outcome based on election results

Historically, there is very little chance that the sitting president will be dethroned. Barack Obama, the previous Democratic president, got nominated twice, according to Jim, there is a chance that will happen again.

He is betting on Donald Trump based on the polling trends. By his analysis, the stock market will see an upturn if trump wins. The very simple reason for that is Joe Biden has been a proponent of raising taxes. Investors are not very fond of higher tax policies since it reduces the amount of money they can put in the market.

What other factors can motivate the voters?

Although both parties have expressed strong concerns regarding China’s domination in the domestic and foreign markets, it has become clear that there are more pressing concerns.

The United States has seen constant protests against police brutality, which sometimes ended up in riots. Even the United Nations has expressed concerns regarding the way the sitting government is handling the crisis. On top of that, people are concerned about the management of the COVID-19 crisis. Even though primarily both parties wanted to run on a platform of stronger foreign policies, voters will be swayed by their domestic stands in these issues.

How does China’s involvement affect the market?

Jim says China has been quite restrained in the way they have been handling the COVID-19 in economic downfall. It does not seem like they believe the USA is anytime going to dethrone them from the progress they’re making to capture the global market, or they would have reacted much strongly.

There are signs that China is becoming detached from the rest of the world because of the recent events, but that could be a temporary setback.

Is there going to be an immediate change in the market?

In Jim’s opinion, markets usually tend to discount US elections, so there is a possibility that a big sell-off is coming. The possibility of that happening is just before the elections. In the worst-case scenario, it will happen right after the election, depending on which candidate has won the election.

The United States stock market is performing very highly despite the huge debt and problems the country is running into. So, the only question we need to be asking is when the selloff is going to come. And whether the issues in the stock market will end this year or the next. He gives some hope to the common investors by adding that he does not think the problems will last forever and, at worst, things should be looking better by the end of next year.

How are the emerging markets going to react based on the US election?

Emerging markets are really hot right now because a lot of money is being printed and spent. Investors have to put their money somewhere, and they are looking to invest in solid opportunities like India, where a lot of emerging markets are rallying.

Although he has not had the chance to invest in the Indian market in the last few years, he is trying to catch up. He thinks investors who plan to put their money on the Indian market are making a wise choice.

What investments are solid options right now?

Jim strongly believes that while pro-risk asset classes like equities have failed to live up to the expectations, the anti-risk asset classes like gold are outperforming in the market. According to his prediction, gold will go up, and so will silver.