NYU Professor Calls Selling Stocks After Trump's 2016 Win His 'Biggest Investment Mistake'

NYU professor Scott Galloway says selling all his stocks after Donald Trump's 2016 election victory was 'probably my biggest investment mistake' and estimates the emotional decision cost him 40% of his liquid net worth in stocks.

Galloway, a professor of marketing at NYU Stern School of Business and host of The Prof G Pod, recalled the costly move during a recent 'Office Hours' episode while discussing how investors should respond to elevated market valuations.

He said the decision was driven by an emotional reaction to Trump's election rather than a deliberate investment strategy. 'So when he was elected in 2016, I sold all my stocks,' Galloway said. 'That was stupid. The market ripped for the next year.'

Stocks Rallied After the Election

Galloway said he expected Trump's election to weigh on the market. Instead, stocks continued climbing. 'There was so much insecurity about him actually winning that the fear had been priced in,' he said. 'Stocks ripped up.'

The S&P 500 gained 3.4% in November 2016, according to the federal government's Economic Report of the President. It rose another 19.4% in 2017, posting gains in 11 of the year's 12 months.

For Galloway, however, the missed gains were only part of the financial damage. He said selling the holdings also triggered a significant capital-gains tax bill because he was living in New York at the time. He then stayed out of the market for roughly six months before deciding to buy back in.

By then, he said, the market had already climbed between 10% and 20%. 'So you could argue, at least notionally, that decision cost me 40% of my liquid net worth in stocks,' Galloway said. The 40% figure was Galloway's own estimate and was not independently verified.

The Cost of an Emotional Bet

Galloway used the experience to warn against making investment decisions based on political or economic fears. 'Trying to guess when the top happens is dangerous,' he explained.

He said investors concerned about elevated valuations should generally remain invested while considering diversification rather than trying to time a downturn. He argued that the broader economy can continue operating regardless of political developments. 'And what the government does matters, but the majority of the economy just grinds on regardless of who is tweeting what or not tweeting what,' he said.

Galloway's Criticism of Trump Continues

Galloway remains a vocal critic of Trump, and his account of the 2016 decision came alongside renewed criticism of the president's economic and foreign policies. He argued that Trump's economic and foreign-policy decisions could cause long-term structural damage to the US economy.

White House spokesman Davis Ingle responded to Galloway's criticism in comments to Fox News Digital, characterising the professor's continued focus on Trump as an 'obsession'. 'Scott Galloway should immediately seek psychiatric help to treat his severe case of Trump Derangement Syndrome that has completely rotted his peanut-sized brain,' Ingle said.

Galloway also predicted in 2024 that Trump could abandon his presidential campaign as part of a potential plea agreement that would keep him out of jail. Trump ultimately remained in the race, won the 2024 election, and returned to the White House.