When President-elect Donald Trump tweets about a company or brand, the stock tends to immediately react, which tends to make company investors… twitchy.
This is why Trigger Finance, the company behind stock market alert app Trigger, created Trump Triggers—a new feature within its app that notifies its users when the President-Elect tweets about a public company in real-time. The move makes perfect sense — Trigger already allows users to set “If This Then That” rules for investing.
Such algorithms have been proposed for a while now, as Jane Barratt, CEO and founder of online investment company GoldBean (a founder from the inaugural class of INV Fintech, Bank Innovation’s sister startup accelerator), noted in the video below, but this marks the first such iteration of the concept.
As stated previously, the market tends to react rather quickly to one of the President-Elect’s tweets—as in the recent case with Ford, for example—something that represents a new risk, according to Barrett.
“It’s a whole new category of risk when someone with the power to profoundly influence sentiment for or against a company makes a public statement,” said Barratt, Her investment firm GoldBean allows users to build personalized online investment portfolios, using transaction history to inform newbies where they might like to put their money based on where they’re already putting it.
Keeping an eye on market trends is of course a must for investors—that is the entire point behind Trigger, after all, which, according to its website, offers other “triggers” or alerts besides Trump Triggers (at the moment just for Apple users; Android functionality coming soon)—but not if that investor panics over every dip in the market.
The President-Elect’s tweets create short-term volatility in the market, according to Barratt—which presents its own challenges and potential opportunities, but shouldn’t be a cause for panic for those investors who are more focused on the long game.
“We recommend that our clients think long term, and focus on industries and companies that are more likely to thrive in the future,” says Barratt. “Individual tweets are short-term distractions and should only be incorporated into investment strategies when they are part of a bigger picture or growth or decline.”Like This Post