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well holy Roma this is going to have some far-reaching consequences for the marketplace whether it's stocks bonds real estate it doesn't matter how Speaker Nancy Pelosi just initiated impeachment proceedings against Donald Trump now it's obviously still very early in the process but we have not seen something like this since 1998 when Bill Clinton's impeachment was initiated now he was later acquitted but we're gonna go through and find out what happened in Prior impeachments in terms of how the market reacted what should we expect now how is this going to affect the China trade war negotiation how should you be investing in real estate and stocks of what should you be investing in right now oh my - there's a lot to cover ut first things first I just have to give you a quick 15-second note with a few disclaimers number one no this is not designed to be political I'm not trying to take the left side or the right side I just care about helping you make money number two I'll be in Miami on October 12th helping you learn how to make money check out that link below and 3 huge shout out to Miranda Dennis for her unsolicited feedback about my real estate investing course where she was initially skeptical and worried that she would just find things she could find on Google but when she joined the course she realized there was way more to be learned remember that coupon code below expires September 30th alright now let's talk about the impeachment first things first what happened here well let's give you a very quick primer on this allegedly around the same time a Donald Trump was freezing about 391 million dollars of aid to Ukraine according to the New York Times Donald Trump allegedly had a conversation with powerful people over in Ukraine and said hey you folks might want to check out Joe Biden's son for some possible ethical violations or some Sheamus now in case you don't know while Joe Biden was vice president his son Hunter Abidin had a role in some kind of Ukrainian gas company and allegedly according to Business Insider was paid upwards of $50,000 per month for whatever role he was doing there now it's important to keep in mind that a lot of this is still a very uncertain we're not sure did Donald Trump freeze funding at the same time as sort of leverage to get Ukraine to investigate Joe Biden's son what was Biden's role at this Ukrainian gas company and what is the impact of all of this anyway well the impact is what I'm most interested in talking about because when the impeachment was first announced the Dow Jones promptly dropped almost five percent according to Reuters yet the stock rebounded after Donald Trump said hey you know what let's just release the not only whistleblower report related to this but let's also release the transcript of the phone call that happened now this is all pending we haven't seen these reports yet but these are still going to be very interesting when they finally get released after these a Trump tweet saying hey you know what we're just gonna put everything out there the Dow and SP did quickly recover now both of them did end a slightly down just under a one-percent Amazon leading the fall of the SNP dropping a little over 2% however Nike did very well with their stock jumping over a five percent after hours as they beat analysts expectations in their earnings call I think it's safe to say that we already saw the start to some potential volatility that could be coming out of this impeachment process now what exactly is the impeachment process well let's make this also as simple as possible here's a graph from The New York Times which says that first that the investigation begins within committees and then the house can decide if they want to hold a vote to actually impeach the president it's important to note that impeaching the president just means to bring about a trial it doesn't actually mean he's out the house needs 220 votes to officially impeach Donald Trump and 190 members according to the New York Times have already indicated they're willing this to impeach Trump and that's before all of these reports come out which could be good for Trump or they could be bad for Trump we'll see now if the house does vote to impeach Donald Trump then the impeachment process goes on over to the Senate which what's interesting about the Senate is it's controlled by Republicans what that means is there's a potential absolutely nothing will happen when the impeachment process gets to the Senate in fact Senate Majority Leader Mitch McConnell could literally sit on the trial and never bring it to the floor of the Senate that is of course unless our Chief Justice John Roberts swoops in to the Senate to take control of this trial and actually bring it to the floor although there's no real rule that at least in my research I was able to find that said hey yep it's gonna be Chief Justice John Roberts or it's Mitch McConnell it seems like these are pretty unclear and untested waters but now even if the Senate decides to hold a trial they would essentially have to have such damning evidence against the president that is a Republican president to essentially turn on their Republican president which would not be good for the Republican Party or the Republican senators in fact you could probably argue that the only way Trump will probably get fully impeached as if Democrats control the house and the Senate which means all of this could be going on through the next election that is of course if Donald Trump wins the next election and then at the end of the trial a supermajority of the Senate must actually vote to kick the president out of office in other words this is gonna take a really long time if this actually has some far-reaching consequences for the market and China though but actually not even just a China but it also risks continuing to polarize are already pretty divided country in fact after reading both the Wall Street Journal and The New York Times I keep seeing references to Alexander Hamilton who says that there's nothing more polarizing than an impeachment process all right so now we have some basic background on what the allegations are how the stock market reacted to the initial allegations and the initiation of this process then we now understand what the actual process is and we realize it's probably gonna take our really friend a long time and now what does history tell us about how the impeachment process can affect the market and what expectations should we have for the market today well first things first I think it's helpful to say that Market Watch sees the odds of impeachment that is the odds of the house actually passing the impeachment or the beginning of the trial for Trump had 45% which is actually pretty dang high it's a lot higher than I thought or expected but according to the Financial Times what historically happened at the last two impeachments we had well in 1973 the impeachment process against a president Richard Nixon began and the market was plummeting and plummeted even more during the impeachment process in fact the United States has started going into recession and the Dow and S&P fell 40 and 42 percent respectively during the impeachment process now unfortunately the Nixon impeachment might not be the best example because a lot of things happened around 1973 in fact in 1971 the United States left the gold standard which led to a lot of inflation and ultimately a recession but not just that in 1973 the same year as the impeachment process began right before Richard Nixon ended up resigning in 1973 we have the arab-israel war that broke out in October of 73 and as a result the economy suffers a massive oil price shock sending oil prices through the roof and creating gas shortages in the United States all coming together to lead to a pretty ugly recession interestingly though after stocks dropped 40 and 42 percent in 1975 the stock market almost immediately gained 38% in 1976 the market rose another 17.9% by the way in case any of you want a link to the articles I'm referring to they are linked down below and no they're not affiliate links but yes you have to scroll past my course first so unfortunately the Nixon impeachment isn't really helpful but what about the Clinton impeachment in 1998 well the day the Clinton impeachment began the SP fell a familiar 4.9 percent or roughly 5 percent which is almost the same thing that happened yesterday when the impeachment process was announced against Donald Trump a very interesting similarity but it gets even more eerie because at the end of the day when the Clinton impeachment process was announced stocks ended up down roughly between 1% and flat which is pretty much the same thing that also happened the day the impeachment was announced against Donald Trump yesterday well so far that sounds a pretty similar to what happened with Trump but during the Clinton impeachment the market did experience a pretty nice bull market unfortunately I can't say the same about our market today but continuing to look at Clinton's impeachment from the day according to the Financial Times that Clinton was impeached to the day that he was acquitted that is not convicted not removed from office the Dow Jones went up 20% and the SP rose over 28% so unfortunately I don't know that looking to history is really going to help us but what will help us is recognizing that what happens every time talk with China gets tough the market turns red and I can tell you this much an impeachment process against Donald Trump is not going to look good in negotiations with China because in my opinion Donald Trump has the best leverage over China if China believes Donald Trump is likely to be reelected now remember this is not a political opinion I'm not I want Trump to be reelected or not elected I'm simply saying that Trump has greater leverage against China if he doesn't have these issues going on so the more of these issues happen the more tenuous trade talks are going to be with China and unfortunately the more volatility we should be expecting in Sox foreign index funds especially I think those are going to see a lot more red any kind of foreign markets I think are going to suffer a lot more than US markets but even US markets will be volatile and we're going to see a lot lower real estate confidence a lot lower real estate confidence usually manifests as builder confidence going down and less new construction I also think this means we're going to see a lot more volatile US real estate sales data but now I'm going to switch the script on over to CNBC and reference their article where they say hey you know what the economy is unlikely to see serious damage if Trump actually gets impeached in fact a writer over at arc Digital says hey you know what the market might actually be pricing in a trump impeachment because there's really no surprise according to this writer we all already know what kind of person Trump is this is the opinion of the art digital writer simply trying to relate this to the marketplace and for the marketplace isn't going to be surprised that allegations that Trump then really all we have to worry about is what's gonna happen with the China trade negotiation now Donald Trump said in an interview with Fox News that the market will crash if he gets impeached but this could be a defense tactic it makes sense to say that especially since he sees himself as the person championing championing the current market so now practically what does this mean well if we do see more drama with the China as a result of this new impeachment process expect possibly lower mortgage rates because as the Federal Reserve watches more drama unfold in the marketplace they're more likely to reduce ray and lower rates at the Fed while they're not directly tied into mortgage rates usually if the Fed comes out a little more dovish and starts reducing rates more aggressively mortgage rates tend to follow that path downwards now mortgage rates held pretty stable dala last time a Fed adjust reduced rates but that's because the markets already anticipated that but what I'm suggesting here is that mortgage rates for houses could come down more if the Fed responds more aggressively to changes in the marketplace now yes I've gotten this question on Instagram a lot yes I am a tracking what the Federal Reserve is doing in there overnight operations specifically related to the repurchase a market the repo market but I don't have a comment for you on that just yet so if I were to tie this all together I think what we're experiencing here is honestly a lot more of the same the China trade conflict is going to be first and foremost what everybody's looking to the economy still seems to have growth and steam in it but there are problems lingering and cracks starting to show in the marketplace and we really want to pay attention to these cracks so as usual my advice stays consistent focus on index funds that are diversified consider investing in things like a wealth front index fund even though you're going to have some exposure to the foreign stock market I do like wealth fronts index fund of index funds especially if you invest up to the limit where you're not paying wealthfront any fees which I've talked about in other videos and of course you can continue to throw money into Vanguard index funds in US stock market funds or even a certain portion of a bond index funds with Vanguard just to diversify your risk a little bit but as far as real estate is concerned I'm gonna use this bad news to my advantage and in all of my negotiations with sellers I'm going to be using this drama to keep buying below market value real estate those wedge deals that I teach you how to scoop up in that real estate investing course so you can learn how to boost your net worth dramatically when you start buying these quality properties now I oftentimes get the objection that oh well I can't find any good deals in my marketplace if people are flipping in your marketplace you can find good deals and negotiate good deals in your marketplace you just need some help strategizing on how to do it I will say though I don't think Trump will get kicked out of office at least until the election if he loses the election well then he's obviously out of office if he wins the election and Democrats control the house and the Senate then I might start worrying a little bit more about a president actually getting kicked out at which time I would expect dramatically more volatility in the marketplace so I'll definitely be keeping an eye on this impeachment process but there you have a my take on how the market is going to react to the Donald Trump impeachment proces]
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