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Are Trump’s Tweets Driving a Breathtaking New Frenzy of Trading?

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carrier corpLately, times have been tough for brokerages relying on trading. Between getting squeezed by the flow of investors to index funds and investment advisors who act as fiduciaries of client money rather than securities distributors, business has been rough on brokerages where trading fees pay the bills. Brian Hershberg writes on the WSJ’s MoneyBeat blog that the Tweets of incoming president Donald Trump have boosted online trading by creating volatility around certain companies’ shares.

Discount brokerages are hoping President-elect Donald Trump keeps things interesting with his tweets after he takes office.

In the weeks since Mr. Trump’s election, discount brokerages have seen a jump in trading activity among their clients—day traders and mom-and-pop investors, among others—pushing commission revenue higher at time when brokerages have struggled to boost trading fees.

“Just the social-media presence of the president-elect has an unambiguous effect on our business, which is making commissions every time somebody makes a trade,” TD Ameritrade Chief Executive Tim Hockey said in an interview with WSJ Wealth Adviser.

TD Ameritrade said it saw an average 487,000 client trades a day in the quarter ended Dec. 31, 11% more than the year before and the company’s third best quarter ever. Mr. Hockey said trading surged following Mr. Trump’s win and continued to pick up whenever the president-elect targeted his tweeting at a specific company.

Read more here.

Despite the surge, trading is a dying business. Brokerages are in the sales business, and have no reason to put your interests ahead of their own. If you’re looking for an investment advisor that has no conflicts of interest, choose one with a fiduciary responsibility to you. At Richard C. Young & Co., Ltd., we are bound by a fiduciary standard to put clients’ interests at the forefront of every decision we make with their money. You can sign up for the Richard C. Young & Co. client letter (free even for non-clients) by filling out the form below.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com