“It’s going to be a bumpy ride.” The shambolic start to the new Presidential Administration has caused a number of investor concerns. Initially investors gave the benefit of the doubt to the new President and his team, but lately many fundamental beliefs have been put to the test. For instance, would tax reform stand a chance? Health care reform is also in doubt and infrastructure spending is receding further into the background.

This is probably much too negative a view. Increased infrastructure spending has a high likelihood of being enacted this year. Both parties are in favor of this spending and are likely to agree on many of the same priorities and approaches. Tax reform was always going to be a heavy lift. This will take a year or more to come up with a passable approach. Many philosophies need to be merged and compromises made. Healthcare reform remains a question mark.

Does all this mean that good returns are not possible; no. It means that progress will be bumpy, but still likely to be achieved. Company earnings are climbing and the business environment has improved. Some of this is due to the new administration and some is not.

The bottom line is that underlying fundamentals are good and not totally dependent upon the new administration’s initiatives. Stay steady, my friends.

The Lonely Bull