You won't believe how much Trump has made US investors

A month ago today, the world woke up to the news that a former TV presenter and firebrand Twitter addict, with absolutely no experience of political office, had been elected as president of the United States of America. A recipe for disaster, surely?

Nope, in fact it's been quite the opposite, and investors, certainly on Wall Street, are already hailing him a hero.

President-elect Trump doesn't get the keys to the White House until 20 January, but already the Dow Jones is up 1,282 points, or 7% since the election, and Wall Street's love-in with Donald Trump shows absolutely no sign of cooling.

A campaign promise of up to $1 trillion (£794 million) of infrastructure investment, spending more on defence and cutting corporate tax rates has won over traders. Policies that generate significant economic growth, and hint at light-touch regulation on Wall Street have also forced doubters to quickly unwind short positions.

So investors have made a fortune by backing Trump. But how much?

I've been talking to the guys at stockmarket index creator Wilshire, which came up with the still widely followed Wilshire 5000 index in 1974. It's a market-capitalisation-weighted index of the market value of 3,626 companies actively traded in the US.

According to analysts there, the index market value was $25.5 trillion as Americans went to the polls on 8 November. As we know, Dow futures were marked down over 700 points as Hillary Clinton conceded.

However, by the time trading wound up for the day on 7 December, the index was worth a colossal $27 trillion. Put simply, the value of US companies available to buy and sell on the stockmarket has risen by $1.5 trillion in the four weeks since Trump's victory.

That's a staggering $4,644 for every man woman and child in America.

And it could be even more. Only Scrooge would bet against the Dow hitting 20,000 for the first time by year-end. If the much talked about wall of money sat on the sidelines decides to join the party, it'll be sooner.

And why do we think that?

Well, a friend in the City kindly pointed out this week that the Dow Jones had made a 12th all-time high since the election - it's more now. Crucially, the Dow Transportation index just made a record high, too.

According to Dow Theory, a new bull market is born when Dow Industrials make a new best and it is confirmed soon after by Dow Transports doing the same. If right, a new bull market was born this week.

How long it will last, however, is a different matter altogether. Next year brings political uncertainty by the bucketload and the pace of Federal Reserve interest rate hikes will be watched very closely indeed.

There are myriad of banana skins in 2017, but then every correction, or slump in 2016 - China, Brexit, Trump, Italy - became a buying opportunity. One suspects the same may be true next year.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.