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Experts: Stock market healthy

Trump policies get credit, Pentony says

Despite a dip in recent days, the stock market has continued to climb to new heights recently.

“I think when you see new records being made, you're seeing confidence from investors,” said Wendy Bennett, president of Bennett Associates Wealth Management.

The Dow Jones index reached a record high on Nov. 15, reaching above 28,000 points and continued with a 31-point increase by close on Monday.

Since then, the Dow has dropped 270 points over the course of three days.

As of 5 p.m. Thursday, the Dow settled to 27,766.29.

“We've had a pullback,” Bennett said. “It reached about three days straight of new records last week.”

Bennett said it is not unusual for the market to fluctuate, but the core fundamentals of a healthy market should still encourage action.

“Day-to-day changes should not change your investment objective,” she said.

Howie Pentony, president and client portfolio manager for Pentony Capital Management, said the stock market has been in a good place for an unusual amount of time.

“The market has been particularly strong really since 2009,” Pentony said. “It's kind of unusual. I would say President (Donald) Trump's economic policies have played a part in businesses feeling better about the economy and hiring workers.”

Pentony added that the market was on the rise during President Barack Obama's administration too, but the former president was much more anti-business. He said Trump has been far more accommodating to businesses.

Under the tax plan set forth during Trump's administration, the corporate tax rate was lowered from 35 percent to 21 percent, while some related business deductions and credits were reduced or eliminated.

“That increases corporate profits,” Bennett said. “As prices go up, their stock is more in demand.”

Bennett said she also usually has to remind people that it's important to diversify a portfolio, so as not to be at the whim of such fluctuations.

“If you have a good allocation, you're not going to move in complete synchronicity with that index, and I think that's where a lot of people get confused,” she said. “I believe the best advice to give investors is to have long term goals and worry less about the here and now.”

Pentony said the current market has all the indicators of continuing to be healthy. He said some people will benefit more than others.

“Generally the people who are benefiting today are the people who are saving for their retirement,” he said. “That's a good thing. It benefits people who are working.”

But Pentony hears the same questions all the time — what's the market look like in the future, what should I do about it?

He said there's really not a great response he can offer them. Just an opinion.

“It's likely that the stock market will be higher in 10 years, than it is today,” Pentony said. “The secret to all this is nobody knows. No one knows what's going to happen.”

He said he also thinks if any of the current Democratic candidates are elected, it will have a negative impact on the market. He said companies need to continue feeling comfortable for continued success.

“Elizabeth Warren is a socialist. Capitalism doesn't work with socialism,” Pentony said. “I would not think the market would do well if she was elected, in my opinion.”

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