The latest stock market surge caught the full attention of President Donald Trump over Super Bowl weekend. Trump is now predicting the Dow Jones Industrial Average will hit 100,000 before the end of his term in office. "REMEMBER, TRUMP WAS RIGHT ABOUT EVERYTHING!" he posted on Truth Social during the Big Game Sunday night, after making the 100K prediction.
Trump's prediction came after the Dow surpassed the 50,000 mark for the first time on Friday, thanks to a 1,200-point single-day rally. Trump credited his tariffs for the market growth, and he may have a point. The Dow has risen by some 12,000 points since it fell to around 38,000 following Trump's initial tariff announcement last spring.
Richard Rosso, certified financial planner, understands the president's optimism but also warns there are other factors to consider. "We're in a period of huge infrastructure growth, we're in a period where we're going to see higher tax refunds, where AI is making a lot of companies more efficient, so there are a lot of positives," he tells KTRH. "But you also have to remember you have a lot of consumers who are still hurting, because they live on wages and they are not invested in the stock market."
Rosso points out the Dow is only 30 stocks, so a better gauge for investors might be the broader S&P 500 index, which tends to grow at a slower pace. "I would take the president's prediction as hey, he's happy with the way things are going, and I understand that," he says. "But everybody's situation is different."
Whether the Dow hits 100,000 or not, investors need to make sure they are diversified and not caught up in the short-term emotions of the market. "The markets look out nine, ten, twelve months and try to figure out where the economy is going," says Rosso. "That doesn't mean (the market) is always right, it means it's pricing in what it knows right now and can shift gears quite quickly, as we've noticed."
Photo: AFP