Trump sees market plunge as a good opportunity to buy, but is it?
A day after the worst Christmas Eve for the stock market ever, President Trump touted to Americans that it’s exactly a good time to buy.
According to Reuters, while speaking to reporters in the Oval Office, Trump said he has “great confidence” in U.S. companies and the recent market jitters actually present a good opportunity for investors to buy at lower prices.
“I have great confidence in our companies. We have companies, the greatest in the world, and they’re doing really well. They have record kinds of numbers. So I think it’s a tremendous opportunity to buy,” Trump said on Tuesday, a day after markets plunged, pushing some averages into bear market territory.
The comments also follow Treasury Secretary Steven Mnuchin’s unusual move to announce to the public that he has called all the CEOs of the nation’s six largest banks to ensure their confidence in the markets.
He reiterated his discussions in a tweet, saying that all the banks have confirmed “ample liquidity is available for lending to consumer and business markets” and they have not experienced any clearance or margin issues, further confirming that the markets continue “to function properly.”
The bank executives Mnuchin called include: Bank of America CEO Brian Moynihan, Citi CEO Michael Corbat, Goldman Sachs CEO David Solomon, JPMorgan Chase CEO Jamie Dimon, Morgan Stanley CEO James Gorman and Wells Fargo CEO Tim Sloan.
Yet, despite the announcement on Sunday, markets plunged the following day, pushing the S&P 500 and the Nasdaq into bear market territory, while the Dow Jones Industrial Average remained on the cusp of the threshold.
And, this isn’t the first time that someone in Trump’s camp has made a stock market call.
In February, Eric Trump, his second youngest son, told FOX Business shortly after the stock market had just tumbled into a correction – dropping 10 percent from recent highs – amid fears the Federal Reserve would hike interest rates – that it is “probably a great period to buy.”
“The market's going to continue to look incredibly, incredibly strong. I think actually, right now, is probably a great period to buy,” he said in February.
Trump’s call turned out to be a good one as the market did rebound throughout the year.
What’s more, Trump isn’t the only president to sound off on stock market predictions.
On March 3, 2009, former President Barack Obama told reporters during the financial crisis, that despite the declines, “What you're now seeing is profit-and-earnings ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it."
And, he was right, despite the recent decline, the index has rallied more than 300 percent.
As for the current environment, Chris Whitlow, CEO of financial wellness benefits provider Edukate, said he always discourages people from trying to "time the market."
"Investing in the stock market should be a mid-to-long term strategy. Markets go up and down—putting your money into stocks or funds to try and ride the wave is risky," Whitlow told FOX Business.