Stock market professionals, as well as amateur investors, don’t like the wild market swings such as we have seen over the past few weeks because volatility is the measure of risk. The more ups and downs there are, the riskier investments become.
And looking forward into 2019 there are plenty of investment risks on the horizon: trade wars, interest rate increases, economic downturns, and continuing government instability.
“Investors and businesses may have overlooked one big risk that could come out of Washington next year: The probable impeachment of U.S. President Donald Trump.”
The concern on the minds of investors is how financial markets will react in the face of possible articles of impeachment that incoming House Democrats may be ready to bring against the president early next year.
Steve Okun, of the global investment firm McLarty Associates, told CNBC that the potential impeachment would create turmoil in the markets. He said Trump’s impending impeachment is “a huge risk going into 2019.”
Okun also added that “Democrats will do something on impeachment next year,” citing recent comments made by incoming House Judiciary Chairman Jerry Nadler as evidence of probable impeachment action by House Democrats. Okun said:
“Whether the Democrats will definitely impeach Trump, Nadler didn’t say, but he said he committed impeachable offenses and that came with the hush money cover up and certainly can come with the obstruction of justice with the Mueller report comes out.”
Okun also said that the most perilous time for the stock markets will be when special counsel Robert Mueller concludes his investigation into Russian interference during the 2016 election. He is reportedly expected to be done in February, at which time he will release his report summarizing his findings.
“Washington is going to shut down, literally … because the president is not going to be able to focus on anything but that,” Okun explained.
There is no question that 2019 will be a year of turmoil in Washington, and around the world. And Okun is right that Jerry Nadler and other House Democrats such as Adam Schiff and Elijah Cummings are poised to start impeachment proceedings against Donald Trump at any time. They will probably wait until more evidence is released by Mueller, either through his formal report or in the form of lengthy indictments detailing the crimes of Donald Trump, his family members, and his associates.
Hold on tight, investors. The year 2019 is going to be a wild ride.