Selling the News

Once tax reform passes, I expect the market to react by going down.  

  • Tax reform has already be priced in.   Rotations into stocks that benefit has been occurring for the past few weeks.  Investors will want to lock in these short term profits.
  • Investors will want to delay large gains until 2018.   Tax rates will be lower in 2018 which gives some incentive to take profits in January.   However, if selling drives down the price, more people will be selling to maintain profits.
  • Avoiding a government shutdown will be challenging.  Congress only has until Friday to avert a shutdown and tax reform has limited any negotiations on avoiding a shutdown.
I'm ready for and expect at least a correction over the next few months.

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This is not financial, investment or tax advice. Please consult a professional advisor.

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