Preparing for What’s Next in the Markets

This year has gotten off to a wild start with markets flying around somewhat chaotically in response to a steady stream of rumors.  We need to get used to this sort of market action as the long-term impact of President-elect Trump’s promised policies will be almost impossible to forecast with any certainty. 

Part of this complication stems from the fact that Trump loves to  threaten and pressure his counterparties as part of a negotiating strategy.  This means we won’t know for quite some time which policies he truly wants to implement, whether the policies he does implement are just short-term tactical moves or long-term strategic moves, how the various players will react to the policies, or how long Trump intends to keep the policies in force in case his tactics yield the desired results.  Put more simply, Trump presidency 2.0 will be a nightmare for game theorists who pride themselves on correctly forecasting future developments.  There are simply too many shifting variables to figure out next steps with any certainty.