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Investors: Don’t Sweat Donald Trump’s Tweets

You can’t go online or turn on the television without hearing about President Donald Trump’s latest tweets or pronouncements on China or North Korea — or the latest developments in the Robert Mueller probe. And the stock market news frequently cites Trump’s effect on stock prices.

But, in my view, investors pay far too much attention to what President Trump says and does. Despite what the headlines suggest, presidents tend to have only a limited effect on stock prices. What’s more, the good or bad they do often doesn’t get fully reflected in stock prices until many years after they’ve left office.

I’m not arguing that Trump has no effect. He certainly does, particularly in the minute-by-minute ticks of the markets. But if you really want to understand what makes the stock market move, pay attention to the economic and business news that seldom makes front-page news — except during giant selloffs.

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