By financial engineering, I take it you partly mean that many of these companies are buying back their own stock through borrowing money at dirt cheap rates. That's a consequence of super low interest rates. People need a return on their money. No doubt, valuations are very high, but the stock market is essentially a speculative activity based on technicals, not fundamentals. And the technicals are extremely healthy with all the major indices hitting new high on a weekly basis. There is a tremendous amount of cash sloshing around in the system. I'm not here to outguess the next move in the market. That's a fool's errand. Overvalued markets usually become more overvalued. The average individual investor has missed this whole move. The people who have profited are primarily the pros and money managers.
This market is not worried about anything, whether it be earthquakes, hurricanes, nuclear war, etc. It will take a recession to bring this market down. Once the tax cut gets passed - if the capital gains tax is lowered substantially - there will likely be some selling.
As for Trump's tax plan, Congress is going to pass some modified version of it because if they don't, there jobs will be at stake. So, it's irrelevant whether the Republican Senators personally like or dislike Trump.
You worry too much. Market is going much higher by the end of the year. The prime place to be is international/global. My favorites are IXN, VWIGX, SCZ, FSIMX, GVAL and OAKGX. I'm in them all.
Don't take Trump so literally. His talk is one big negotiation. |
