How will a Trump impeachment affect your portfolio?

[FrugalSaver]

Put aside one's politics. It's clear where the media and the party out of power wants to take this.

Should the Dems win the house, impeachment is game on.

How do you expect this to affect your pocket book?  Are you accumulating cash now?

Business as usual?  Zero preparation for that likely eventuality?

[ILikeDividends]

Put aside one's politics. It's clear where the media and the party out of power wants to take this.

Should the Dems win the house, impeachment is game on.

How do you expect this to affect your pocket book?  Are you accumulating cash now?

Business as usual?  Zero preparation for that likely eventuality?

Clinton was impeached, so there is a historical precedent.  From a market perspective, it was pretty much a non-event.

Removing a sitting president requires more than an impeachment.  After that, the senate has to conduct a trial, and convict the president by a two thirds majority. 

That's why Clinton was not removed from office.

Even if there's a democratic landslide in 2018, I can't imagine that there are enough seats up for contest (only about a 3rd of the seats every two years).  So, theoretically, the dems could win a two thirds senate majority in 2018, but it would have to be a wipe-out in order for them to be within striking distance of a presidential conviction.

Even if they did win, and convict, the executive branch would still be in control of the republicans. 

To answer your question, this would probably invoke a short lived volatility event that is not worth planning for, and would be more a buying opportunity than anything else.

[Retire-Canada]

Business as usual?  Zero preparation for that likely eventuality?

The only way I see Trump being impeached is if Muller finds a smoking gun. He might. He might not. I don't see any point in worrying about it until it happens.

I think it's a political mistake for Dems to try and impeach Trump for stuff that's currently on the table. A much more powerful approach would be to focus on governing the country. The Republican Party's inability to get things done despite controlling all 3 branches is their greatest weakness - not Trump being a douche bag.

[boarder42]

Making money decisions based on hypothetical political situations sounds like a sure way to end up broker.

Change nothing continue investing as usual stop trying to come up with a reason to time an event that likely will not happen. If the party in control of the house went after impeachment for every president in the opposite party we'd be in constant gridlock worse than we are now.

I also like how you start your statement which is 100% political. With leave politics out. C'mon now.

[FrugalSaver]

Making money decisions based on hypothetical political situations sounds like a sure way to end up broker.

Change nothing continue investing as usual stop trying to come up with a reason to time an event that likely will not happen. If the party in control of the house went after impeachment for every president in the opposite party we'd be in constant gridlock worse than we are now.

I also like how you start your statement which is 100% political. With leave politics out. C'mon now.

Then you missed my point. I don't care what ones politics are or whether you believe Trump had Putin win the election for him or not or whatever. I don't personally care much for politics. That was my point - to put aside whether one felt President Trump should or should not be impeached after the Dems likely take the house next November - and evaluate the eventuality of the impeachment that would follow with almost 100% certainty, and what that uncertainty would do for the markets and the huge progress made for those of us that save and invest, on both sides of the aisle, in the last year.

That was my point in making that comment.

[secondcor521]

The next trading day after President Clinton was impeached, the stock market - as measured by the S&P500 - went up about 1.24%.

From the day after the Committee approved articles of impeachment against President Nixon to the day after he resigned from office, the stock market - as measured by the S&P500 - went up about 0.55%.

It turns out the S&P didn't exist in 1868 when President Jackson was impeached.

In order to impeach President Trump, the House would have to pass a resolution with a simple majority.  Assuming a strict party line vote, the Democrats would need to have a net gain of 25 seats in the 2018 elections.  I am unsure of the likelihood of that, and that's probably a hard to estimate thing.

So an impossible-to-predict chance of a slight market uptick is something I don't plan around.

[neil]

You can pretty much place bets on anything these days.  The only sure way to profit from an impeachment is to place a prop bet.

Otherwise, I agree with the above.  I don't think the market cares which Republican is president.  They got their tax cuts and Senate control isn't going to roll that back.

[bacchi]

From the day after the Committee approved articles of impeachment against President Nixon to the day after he resigned from office, the stock market - as measured by the S&P500 - went up about 0.55%.

But it went down 14% when Nixon was trying to contain Watergate. What's more important is how Trump reacts to any possible impeachment.

Agreed that it ultimately won't affect the markets. If it does, there will be more important things to worry about.

[ILikeDividends]

You can pretty much place bets on anything these days.  The only sure way to profit from an impeachment is to place a prop bet.

Otherwise, I agree with the above.  I don't think the market cares which Republican is president.  They got their tax cuts and Senate control isn't going to roll that back.

Theoretically, the entire tax bill could be rolled back.  But overriding a presidential veto requires a two thirds majority in both houses.

That's not entirely out of the realm of possibilities.  But what is an "unpopular" tax bill today, could very well become quite popular, after everyone gets a year's worth of experience with a lower tax economy.

Throwing rocks from the minority sidelines is easy to do.  Not so easy to be the party held responsible for wrecking the economy and rolling back your tax cuts.  And a stock market crash would probably not be something the dems would want to cheerfully take credit for, either.

I figure the odds of rolling back the tax bill are really low, regardless of how well the dems do in the next election.  Not impossible.  But not very likely, either.  Yes, they are Democrats.  That might mean different things to different people, but that doesn't mean they are stupid or suicidal, no matter what your political stripes might be.

[secondcor521]

From the day after the Committee approved articles of impeachment against President Nixon to the day after he resigned from office, the stock market - as measured by the S&P500 - went up about 0.55%.

But it went down 14% when Nixon was trying to contain Watergate. What's more important is how Trump reacts to any possible impeachment.

Agreed that it ultimately won't affect the markets. If it does, there will be more important things to worry about.

Fair point.  I don't know the history of the market during that time, but from what little I know the market was doing pretty poorly in the early 1970's anyway.  So I think it would be hard to decide how much of the decline to ascribe to general market conditions and how much of the decline to President Nixon's impeachment.

A similar argument holds the other direction as well.  1998 was a very good year in the market, the same year President Clinton was impeached.

[2Birds1Stone]

Dilly dilly.

[Indexer]

Put aside one's politics. It's clear where the media and the party out of power wants to take this.

Should the Dems win the house, impeachment is game on.

How do you expect this to affect your pocket book?  Are you accumulating cash now?

Business as usual?  Zero preparation for that likely eventuality?

How would it affect my pocketbook? Not at all.

Zero preparation for that likely eventuality? For starters, what makes it likely? How would I prepare if I believed it would happen? Markets don't like uncertainty, which is why they are more volatile around elections, but once the uncertainty passes they are fine. If there was a trial and impeachment I would expect some short term volatility followed by a whole bunch of not giving a shit. If Trump goes away the economy will carry on.

What presidents and congress do accomplish, good or bad, takes years... sometimes decades... to impact the economy. Exceptions: massive screw ups, like the government's response to the crash in 1929.

[PDXTabs]

The only way I see Trump being impeached is if Muller finds a smoking gun. He might. He might not. I don't see any point in worrying about it until it happens.

I think it's a political mistake for Dems to try and impeach Trump for stuff that's currently on the table. A much more powerful approach would be to focus on governing the country. The Republican Party's inability to get things done despite controlling all 3 branches is their greatest weakness - not Trump being a douche bag.

I too believe that it would be a political mistake for the Democrats to impeach Trump. With that said, how much do you think Ryan and McConnell are willing to put up with? What if they decide that it would be politically advantageous to get him out of the way?

EDIT - Also, none of it changes my investment strategy.

[Villanelle]

Making money decisions based on hypothetical political situations sounds like a sure way to end up broker.

Change nothing continue investing as usual stop trying to come up with a reason to time an event that likely will not happen. If the party in control of the house went after impeachment for every president in the opposite party we'd be in constant gridlock worse than we are now.

I also like how you start your statement which is 100% political. With leave politics out. C'mon now.

Then you missed my point. I don't care what ones politics are or whether you believe Trump had Putin win the election for him or not or whatever. I don't personally care much for politics. That was my point - to put aside whether one felt President Trump should or should not be impeached after the Dems likely take the house next November - and evaluate the eventuality of the impeachment that would follow with almost 100% certainty, and what that uncertainty would do for the markets and the huge progress made for those of us that save and invest, on both sides of the aisle, in the last year.

That was my point in making that comment.

I disagree that impeachment is all but a certainty if the Dems win control. Why on earth are you so confident it would happen?  The Minority Leader herself has tried to move away from impeachment talk, and she's far from alone.

  Further, I think that, barring some new revelation, even if he is impeached, he won't be removed from office. Two thirds of senators would need to vote to remove, and certainly the Dems won't get that large a majority, so assuming it goes even close to along party lines, it will be symbolic only.   So I think it would be a fairly small blip on the investment radar.  Some short-ish term volatility and nothing more. 

So, I'm doing nothing and will continue to do nothing on the off chance he is impeached, and the even more off chance he is removed.  Just like I did nothing when similar questions were asked before the election, and after the election before Trump took office, and so many other times about so many other things.

[MrThatsDifferent]

I think the impact on the market would be negligible. The market wanted the tax cuts, that’s it. It’s got that that and businesses are happy. Nothing DT does now will top that. He could make things worse by fighting with NK and freaking everyone out. DT is a greedy megalomaniac, the best person for businesses. But if he was impeached, it wouldn’t matter as he’s served his purpose. I’m not moving my money or changing strategy at all. The advice was, keep putting the money in, regardless so that’s what I’ll be doing.

[boarder42]

Making money decisions based on hypothetical political situations sounds like a sure way to end up broker.

Change nothing continue investing as usual stop trying to come up with a reason to time an event that likely will not happen. If the party in control of the house went after impeachment for every president in the opposite party we'd be in constant gridlock worse than we are now.

I also like how you start your statement which is 100% political. With leave politics out. C'mon now.

Then you missed my point. I don't care what ones politics are or whether you believe Trump had Putin win the election for him or not or whatever. I don't personally care much for politics. That was my point - to put aside whether one felt President Trump should or should not be impeached after the Dems likely take the house next November - and evaluate the eventuality of the impeachment that would follow with almost 100% certainty, and what that uncertainty would do for the markets and the huge progress made for those of us that save and invest, on both sides of the aisle, in the last year.

That was my point in making that comment.

yes but your statement that impeachment is 100% certain is 100% a political statement.  so the entire basis of your claim is political. 

but doesnt change any part of my statement that you're trying to market time and even if you had a political crystal ball(why you'd pick that over a market crystal ball is beyond me) and you were correct and you have predicted it - this should not change anyones investment strategy b/c we dont know what the market would do IF he got impeached which is not 100% likely i'd say its less than 1% likely.

so what would you do if it was 0% likely the same damn thing you'd do if you found out it was 100% likely - keep doing the same thing

[Chavak]

Not going to worry about it since Trump isn't going to be impeached.
And if he was....not much I can do about it anyway, so not going to worry.

[facepalm]

To answer your question, this would probably invoke a short lived volatility event that is not worth planning for, and would be more a buying opportunity than anything else.

I like your thinking.

I'm more concerned with the rise of interest rates.

 I do not think there is any likelihood of Trump being impeached over anything that happened in the past. However, it is possible that he may do something so stupid in the future that he is brought up on charges.

[Kyle Schuant]

Not at all, and Trump will never be removed from office by Congress.

[Mighty-Dollar]

Put aside one's politics. It's clear where the media and the party out of power wants to take this.
Should the Dems win the house, impeachment is game on.

Try impeaching a president without cause and you will have civil war. The whole collusion thing was a political witch hunt from day one. No evidence. The whole thing was created out of thin air by the democrats, so there is no chance of impeachment despite desperate media coverage for a year. The media is already trying to save face for shoving this down everyone's throat.

[MrThatsDifferent]

Put aside one's politics. It's clear where the media and the party out of power wants to take this.
Should the Dems win the house, impeachment is game on.

Try impeaching a president without cause and you will have civil war. The whole collusion thing was a political witch hunt from day one. No evidence. The whole thing was created out of thin air by the democrats, so there is no chance of impeachment despite desperate media coverage for a year. The media is already trying to save face for shoving this down everyone's throat.

Created out of thin air? Every intelligence agency supports Russian interference in the election, for DT. DT, his family and associates all have connections to the Russians. This wasn’t a stretch. Swap DT for Obama and you’d be asking for his head. Sheesh.

[theolympians]

Continue to fully fund my 457, and put as much as I can in my IRA. I will adjust nothing.

[powskier]

Other than splurging on a bottle of Champagne , it won't affect my finances.

[facepalm]

Try impeaching a president without cause and you will have civil war. The whole Lewinsky thing was a political witch hunt from day one. No evidence. The whole thing was created out of thin air by the Republicans, so there is no chance of impeachment despite desperate media coverage for a year.

They attempted to impeach Clinton, and there was no civil war. So if the same happens to Trump, I highly doubt we will see hand to hand combat in the streets.

And for the record, I do not think that if the Democrats retake the Senate, that they will do anything. If anything, they will want to keep Trump in office.

To keep on topic, I don't think this will have any affect on my portfolio.

[JAYSLOL]

I have no idea how that might affect me, and I don't think I'll bother trying to figure it out as it seems like a long shot.  Instead I think we should discuss this

https://m.youtube.com/watch?v=nranUeNkXpM

[ChpBstrd]

I agree this scenario has no effect on my allocation.

I also think Trump has virtually no chance of being impeached. Republicans are too loyal, even if piles of evidence are found. Democrats would have to find a way NOT to impeach him because Trump is steadily demolishing the Republican brand, and trading him for Mike Pence would be like trading an incompetent enemy for a potentially competent one.

My view of history is that markets rally on the prospect of nothing getting done in Congress. Statistically, stocks perform better when Congress is divided than when one party controls both houses. 2017 was a bit of an anomaly, but also bear in mind that practically nothing got done either. The more time and attention Congress spends on Trump, the less likely they are to pass something that will wipe out entire industries or demolish consumer confidence among entire demographics (e.g. healthcare, entitlement, or immigration "reform").

That said, record low volatility is tempting me to buy put option protection on a portfolio full of SPY. For just 3.3% per year, you can be guaranteed not to lose more than that for 3 years ON STOCKS. At that level, the price to eliminate most risk is lower than the average annual return from such a hedge over the last few decades. Historically, 20-30% drops occur every handful of years. With P/Es this high in a rising rate environment and with a narrowing yield curve, this seems like an unusually good bargain. Especially if Trump ever decides to cut back on the golf!

[Kyle Schuant]

They attempted to impeach Clinton, and there was no civil war. So if the same happens to Trump, I highly doubt we will see hand to hand combat in the streets.

It's more that it simply wouldn't happen. How long since one of the parties has had a 2/3 majority in both House and Senate? So realistically some Republicans would have to vote to convict him. Which would make the Republican Party go the way of the Whigs. Only the Tea Party faction is crazy enough to destroy their own party for some (perceived) larger principle, and they'll be on Trump's side.


As Louis Thoreau said, Trump's genius is that in a country with a culture of shame, he is utterly shameless - and people love him for it. He could fuck a goat on the White House lawn while reciting a copy of Das Kapital and his supporters would still love him. Any conviction by the Republicans would be taken as a betrayal of all the voters, and the party would implode and fizzle into non-existence, with some new party appearing in their wake.

So it simply won't happen. He can get impeached, but he won't be convicted. Which means if they have any brains they won't bother impeaching him - trying and failing would hurt his opponents more than him.

As the other guy said, division is good for the market, because division means inaction, which means greater certainty for business. Business can adapt to virtually any combination of taxes, subsidies, tariffs, and regulations, what fucks it all up is things changing all the time. A while back Belgium went like two years without a functioning government (they couldn't cobble together a majority in Parliament, so just had a caretaker government that did nothing) and their economy boomed.

[HoustonSker]

If it found that Trump and the Russians coined the term “Crooked Hillary”, impeachment is a done deal, per Maxine Waters. It’s basically a lock, take it to the bank.

[h82goslw]

Dilly dilly.

Best post in this thread.   And this thread is another reason I get my investing info from bogleheads.org.

[Laserjet3051]

Putting aside one's politics, I think the more pertinent question would be how a Trump re-election would affect one's portfolio.

[boarder42]

This question is a dumb question to ask in these forums. Politics don't affect your investment strategy.  A comparable question would be if pigs fly tomorrow how would that affect your invesent strategy.  Or if you have insider info that unicorns were real how would that affect your investment strategy. 

Around here the general rule is to index index and then index some more.  So. No assumption political or otherwise should affect your investment plan. Unless you truly have some inside information on something like some pharma company is guaranteed to get fda approval on a cancer prevention drug.

Unless this question is in jest. Or this turns into a top is in thread. Then it has little value for conversation.

[grettman]

The only thing we know for certain is that we are all clueless about what will happen tomorrow and the days there after.

The best decision is to do nothing different (unless my own personal circumstances change).