Why the stock market is soaring, and what to watch for
BATON ROUGE, La. (WAFB) – “The reason you’re seeing the market rise is first of all a general sense of relief that the whole election is over,” said chartered financial analyst and founder/CEO of Dent Wealth Advisors, Fred Dent. “Also, the prospect of lower corporate tax rates. Lower taxes for corporations go directly to the bottom line of the company’s stock trade on the market. Means higher prices and more profits.”
The relief post-election has been palpable in the stock market. Just hours after election night the Dow Jones rose more than 1500 points, setting an all-time high.
Investors were happy to open their portfolios and see their stocks soaring.
”My first reaction was opening up my phone and seeing my family group chat going oh my god bitcoin is up to $90,000,” says resident Lawson Huff. “I also invested in another stock, Rocket Lab and it was up a ton. I think it had a 40% increase.”
”Right now, there’s a lot of hype in the market,” said resident Andrew Drumwright. “It’ll eventually correct itself, but I am excited about the overall outlook of the stock market.”
Dent says that along with expectations of lower corporate tax rates, there’s also the potential for less regulatory burden.
Experts say that under President Joe Biden tech companies have felt constricted by policies like Bidens executive order on artificial intelligence – something more and more companies are gravitating towards.
”Well one of the things is that the market anticipates under the new administration there will be less regulatory burdens and that means an ability well, like fewer referees in the football field, it’s a wilder game.”
An important point to remember – nothing lasts forever. Although the market has been surging the last several days, investors should recognize things could change quickly.
“With the market running up like this it’s easy to get caught up in the euphoria and chasing the higher markets,” said Dent. “So just be careful if you’re making new investments the chance exits that there will be a pullback because one day the euphoria is going to wear off.”
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