Scott Galloway Calls Selling Stocks After Trump's 2016 Win His ‘Biggest Investment Mistake’

NYU marketing professor Scott Galloway described his decision to sell all his stocks in the wake of Donald Trump's 2016 presidential election victory as his "biggest investment mistake." On a recent episode of "The Prof G Pod," Galloway recounted how the move, driven by insecurity and emotion, resulted in significant capital gains taxes and forced him to re-enter the market at higher prices.

Galloway stated on the "Office Hours" segment of the podcast that he sold his entire stock portfolio immediately after Trump's election. He characterized this action as "stupid," noting that the market subsequently experienced a significant rally over the following year. He explained that the fear surrounding Trump's potential win had already been priced into the market, leading to an upswing once he was elected.

The decision not only resulted in capital gains taxes for Galloway, who was living in New York at the time, but also led him to repurchase stocks approximately six months later, after they had already risen between 10% and 20%. This compounded the financial impact of his initial decision.

"So you could argue, at least notionally, that decision cost me 40% of my liquid net worth in stocks," Galloway said. He shared this experience as a cautionary tale for listeners, emphasizing the dangers of allowing emotions to dictate investment strategies.

He further criticized Trump, expressing concern that the president's economic and foreign policies could inflict long-term damage on the U.S. economy. "I think the president is a f king idiot and a stain on the American experience and that the grand sum of all of these head up your a ss economic and foreign policy decisions will eventually crash this economy or result in long-term structural damage that will take decades if not generations to repair," Galloway said.

Data from the federal government indicated that the stock market saw substantial gains following Trump's 2016 election. The S&P 500 increased by 3.4% in November 2016 and reached a then-record high later that month, according to the 2017 Economic Report of the President. The 2018 report further noted that the index gained 19.4% in 2017.

Galloway advised that investors should remain in the market rather than attempting to predict political or economic turning points, advocating for diversification as a more prudent approach than trying to time market declines. "Trying to guess when the top happens is dangerous," he stated. "And what the government does matter, but the majority of the economy just grinds on regardless of who is tweeting what or not tweeting what."