The Stock Market and the Election

Don’t Jump to Conclusions

The markets taught us a big and powerful lesson last week.

Most pundits and financial professionals  — regardless of political leanings — believed that if Donald Trump were elected President, stock markets would plunge.

Many expected markets to mimic the reaction after the Brexit vote — a short, strong decline followed by a quick recovery.

Prior to the election, as odds of a Trump victory rose, the markets declined for an unusually long nine straight days.

On election night, as a  Trump victory loomed, stock market futures and overseas markets dropped sharply.

By the opening on Wednesday, U.S. markets had reversed and registered the first of two big gains to record highs.

The big lesson for investors is that predicting stock moves in the short term is a fool’s errand.  Ignore the crystal ball and keep our fears and misconceptions under wraps.

Instead, the lesson of investing history is to control what we can control. Embracing and preparing for uncertainty and marshaling the odds in our favor is the better way to secure a brighter financial future.