What Type Of President Trump We Would Get?

The inauguration of Donald Trump as the 45th President of the United States will take place on Friday, January 20, 2017. Because he is unlike any other President the country has had, there are lots of uncertainties regarding the policies that would be implemented by him. His administration may turn out to be one the most of the unpredictable.

There is plenty of uncertainty about what type of  President he would be in terms of economic policies. The following chart from ING shows the four possible positions he could take:

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Source:  Have markets become too excited about Trump? ING

A “Home Trump” would be the ideal choice for equity investors  and the general population alike.

The US Welfare State In One Giant Chart

The US spends billions of dollars each year in welfare programs to poor people. Though it is the richest country in the world millions of Americans depend on the state for survival. According to the House Ways & Means Committee can astonishing $1 Trillion was spent on 80+ programs through various agencies and departments. The bureaucracy that has been built to spend this money is huge and inefficient as shown in the chart below:

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Source: House Ways & Means Committee

Hat Tip: In One Image, Everything You Need to Know about the Washington-Created Welfare State, International Liberty

Which Stock Market Has Crashed By 99.82% ?

One of the worst stock markets in recent history is equity market of the Mediterranean island country of Cyprus. The Dow Jones Total Stock Market Cyprus Index peaked at 1605.9 in November, 2007. It closed the year 2016 at just 2.95. That is an astonishing plunge of 99.82%.

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Source: Google Finance

Though Cyprus is not a major equity market in the world by any means, it just shows the severity of crashes that can occur. Basically anyone that invested at the peak in 2007 lost almost all of their money. Or to put it another way, someone that invested 10,000 Euros at its peak would now have 18.0 Euros in their account.


Why Investors Can Consider Chilean Stocks Now

Chile must be on the radar of emerging markets investors. Among the major markets in Latin America, Chile is one of the best market due to many factors. Equity investors looking for emerging market opportunities now can especially consider adding Chilean stock. Some of the reasons why Chilean stocks offer excellent potential for income and growth are:

  • Chile is the world’s largest copper producer and exporter. After years of falling copper prices, copper is slowing moving up since the last quarter as shown in the chart below:

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Source: Kitco

As copper prices go up the Chilean economy will benefit. Moreover it should be noted that copper accounts for about half of all exports from Chile.

  • Chile is known for political stability in a region filled with many unstable economies.
  • The country is a member of the OECD and has numerous free-trade agreements enabling Chile to take advantage of trade partnerships with many countries.
  • Companies in Chile are required by law to distribute dividends to shareholders. By law, firms must pay at least 30% of their profits to shareholders. This type of law is unique in emerging countries.
  • This year general elections are due in November.

Some of the Chilean ADRs that investors can consider for further research include: Banco Santander- Chile (BSAC), Banco de Chile (BCH), Empresa Nacional de Electricidad SA (EOC), Itau CorpBanca (ITCB) and Vina Concha y Toro ( VCO)

The complete list of Chilean ADRs trading on the US markets can be found is here.

Disclosure: Long BCH and ITCB

Index Returns: Developed, Emerging and Frontier Markets 2006-2015

I recently came across the following unique chart that compares the returns of Developed, Emerging and Frontier Markets from 2006 thru 2015. The popular charts like Single Country Index Returns chart, emerging markets returns chart, Callan Periodic Table of Investment Returns are easily available online. I will post the updated chart for 2016 when it is published.

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Source: Mirae Asset Global Investments (USA) LLC

Note: The returns shown above are total returns which includes dividend reinvested.

Download: Index Returns: Developed, Emerging and Frontier Markets 2006-2015 (in pdf)

A few observations:

  • The US market as represented by S&P 500 has performed well relative to other markets since 2008. Even in 2008, when emerging and frontier markets plunged by 50% or more, the S&P 500 fell only 37%.
  • In terms of annualized returns over 10 years, Chinese stocks did not have awesome returns when compared to US stocks. As an emerging market that experienced explosive economic growth one would have expected Chinese stocks to vastly outperform US equities.
  • In 2014, Russia was the worst performer but in 2015 it was the best performer. This shows the futility of picking markets and the importance of diversification.

Related ETFs:

  • iShares MSCI Emerging Markets ETF (EEM)
  • Vanguard MSCI Emerging Markets ETF (VWO)
  • SPDR S&P 500 ETF (SPY)
  • PowerShares MENA Frontier Countries ETF (PMNA)

Disclosure: No Positions

The List of New York Stock Exchange Holidays for 2017

The New York Stock Exchange(NYSE) will be closed for the following holidays in 2017:

S.No.Year 2017 HolidayDate
1New Years DayJanuary 1 (Observed on Monday, January 2)
2Martin Luther King, Jr. DayJanuary 16
3Washington's BirthdayFebruaray 20
4Good FridayApril 14
5Memorial DayMay 29
6Independence DayJuly 4
(Market will close early at 1 PM ET on previous day July 3)
7Labor DaySeptember 4
8Thanksgiving DayNovember 23
(Market will close early at 1 PM ET on November 24, the day after Thanksgiving Day)
9ChristmasDecember 25

Source: NYSE

NYSE will observe a total of nine holidays in 2017. On two days the market will close early at 1 PM. These are on July 3rd – the day before Independence Day and Nov 24th – the day after Thanksgiving Day.

On Columbus Day (October 9) and Veteran’s Day (November 11) the NYSE will be open. However the bonds markets will be closed.

Download: The List of New York Stock Exchange Holidays for 2017 (in Excel)