Markets, Politics, Modern Trader & You

MODERN TRADER surveys our readers frequently to solicit opinions on market events and, most importantly,   learn how we can best fulfill our editorial objective of being the essential monthly journal for professional traders and active investors. We truly appreciate this engagement with our readers.  Our most recent survey resulted in a wide range of comments, editorial suggestions, criticism, and insight into the mind of the MODERN TRADER (See Open Outcry).

The most interesting insights from this latest survey touched on the intersection of the markets and the current political environment. History offers some interesting data points. While we believe that in the long run, the market’s health is primarily a function of interest rates, earnings, and economic growth, with that the impact of presidents and their policies is often overstated, some of the numbers are hard to ignore. The aggregate common stock appreciation under the two terms of Presidents Clinton, Eisenhower and Reagan were 171%, 148%, and 138% respectively. Each president’s influence on the economy must be viewed in a broader look at the economic environment they inherited and the events of the day. 

President Trump has hosted the best market performance for a first-year president in more than 50 years with the Dow Jones Industrial Average rising 7.4% in the first half of 2017. As of this writing, stocks are up 19% since the election with the S&P 500 adding more than $2 trillion in market value and on the verge of going 11 straight months without posting a monthly loss of more than 0.1%. The last time that happened was 58 years ago. Corporate bonds have also experienced a “Trump Bump.” While his direct influence on investor optimism is unclear, as is the sustainability of the rally (let alone his administration), prevailing political environments are a tangible market variable.

Perhaps that is why our readers did not hold back on their political opinions in our recent survey. Here is some of what we learned about you:

MODERN TRADER readers voted Republican in 2016
by more than a 2:1 margin:

23% acknowledged their presidential vote for Hillary Clinton vs. 48% for Donald Trump; 9% voted for the Libertarian ticket while 18% choose not to reveal their vote (see “Showing your cards,” right). 

You are a highly-educated and informed audience:
More than 47% of you have a Master’s Degree or a PhD. Considering that 99% of our audience makes some or all of their own investment decisions, it follows that you are highly informed and consume considerably more news than the average citizen; 35% of you have a Bloomberg (or Bloomberg-like) news terminal, and 87% rely upon business and finance print periodicals for their market news.

MODERN TRADER’s highly-educated Republican-leaning audience is an outlier, both statistically and regarding
the mainstream media narrative:

In the 2016 election, a wide gap in presidential preferences emerged between those with and without a college degree. College graduates backed Clinton 52% to 43%, while those without a college degree backed Trump 52% to 44%.
Our highly-educated and well-informed audience overwhelmingly supported Trump. 

Those who did vote to elect President Trump are still very supportive of the new administration:
Of our readers that voted for the president, 70% have a favorable opinion of Trump’s performance thus far; 16% of Trump voters have an unfavorable opinion (see “How am I doing?” below).

But, our Trump-inclined readers are not tone deaf to the administration’s unorthodox communications strategy.
We received hundreds of encouraging messages and suggestions from Republican-voting readers intended for President Trump. The overwhelming majority of the comments contained one simple piece of advice for the new president. ”Stop tweeting.”

Stop using Twitter. Be our president.

A. Curran Jr
Woodstown, NJ
2005

Think fast but be slow to speak (or tweet!)

M Dipaulo
Oswego, NY
2005

Republican voters have an extremely unfavorable opinion of the House and Senate: 
An overwhelming 91% of Republican voters in last November’s election have a negative assessment of the performance of the House and Senate thus far in 2017 (see “Throws the bums out,” below). 

On the whole, reader comments on our editorial were overwhelmingly positive, but some readers questioned the values (biases?) which form the basis of our political coverage.

Since you were so open with us, we will reciprocate. 

Political debates which influence the economy, the market and investor sentiment will always be fair game in our pages. They are implicit to our editorial mandate. 

Generally speaking, “social issues” fall outside of our editorial domain. The exception would be where these social issues may influence a market sector, such as the impact of firearms legislation on the firearms sector, drug legislation on pharmaceutical and marijuana stocks, etc.

Sorry “snowflakes,” Modern Trader is not a “safe space.” Our readers will invariably be exposed to diverse perspectives that are contrary to their portfolios, as well as their politics. We extend the same caution to “ditto-heads.” There are two sides to every trade; we will continue to cover political issues which impact the market and the economy from various perspectives.

If you wonder why the tagline on our cover changes each month beneath the MODERN TRADER logo, we blame Reason magazine. The venerable libertarian publication uses the tag we would love to own: “free minds and free markets.” The phrase underscores MODERN TRADER’s advocacy and core values.

For the most part, our readers seem to understand where we are coming from, and appreciate that our media perspective is outside the “mainstream”…

Your magazine is the best out there. I do like the way you very often take a contrarian viewpoint compared to the major media and the typical talking heads.

G. Aul
Hot Springs, SD
Subscriber since 2015

Please keep the comments coming at openoutcry@moderntrader.com, and thanks for reading.

Jeff Joseph
Cheif Content Officer &
Publisher​