If there is one thing Donald Trump has done in recent times, it is to give the people of American bad advice on when to trade on the stock market.
It is no longer news that the coronavirus has spread far beyond China and into other parts of the world, including America. Not only has the virus affected the world health-wise, but it is also doing its number on us financially.
The virus has led to losses going up to consecutive triple-digits. In spite of this, Trump as of February 24 was still very confident that it was the right time to buy stocks on the market. Part of his tweet on the 24th read “Stock market starting to look very good to me”. Of course, that confidence was misplaced.
Just a few hours after making that tweet, things started turning out bad. The Dow Jones Industrial Average went down from 29,219 to 28,992 losing 227 points.
On the 25th Trump’s director of the National Economic Council, Larry Kudlow further supported the trouble stock market. He mentioned that the market is a lot cheaper than it was before and therefore makes it the opportune time to buy stocks.
On that very day, the Dow fell from 28,992 to 27,912 losing 1,031 points. It eventually turned out that during that week, most points were lost on the stock market in 13 years. The Dow lost around 3,500 points and more than $3 trillion in value.
Fresh of giving bad advice on the stock market, Trump appointed his Vice President Mike Pence as the head of the coronavirus task force. Guess who was also included in the task force? Kudlow. As part of the media coverage for the task force formation, a press conference was held in the white house.
In the press conference, Trump guaranteed the country that the number of Americans affected by the coronavirus was on its way down and not up and that within a short time, the number would become zero.
However, that did not happen. Instead of the number of cases nearing zero, it increased, the number of cases at the time of the press conference rose from 60 to over 600 about a few days later.
To add to the pain of Americans, Trump’s son Eric tweeted in support of his father saying “In my opinion, it’s a great time to buy stocks or into your 401K. I would be all in… let’s see if I’m right…”
Things on the stock market did not get better as more points fell on Monday that it even broke a record. The 2,014 points lost on Monday was the largest single-day point in history. So just for some context, since Trump’s tweet on the 24th of February, the Dow Jones Industrial Average has lost more than 5,000 points.
When compared to what happened after then-President Obama advised Americans to invest in the stock market, we can see a stark contrast. Following the great recession, Obama urges Americans to invest in the markets especially if they have a long-term perspective on it. His advice worked because the S&P 500 rose by almost 225 percent.