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Remember when nearly the entire business media predicted that if Trump was elected the stock market would crash immediately? Some of my smartest friends (at he

• jwilliams 10y ago
  With Brexit the pound also dropped significantly. Even if the markets truck along they've been devalued. The pound dropping has a number of effects (good or bad, it depends on your perspective). It pushed up the market in some areas where the were bargains to be had. It hammered others. It also changed the trade balance of payments Great in the short term if you're an exporter. Terrible if you're buying a supercomputer, or planning a trip. These sorts of things have a much longer term impact.
• tomelders 10y ago
  This is sort of the same sentiment that people have towards things like Bird Flu. It didn't happen, so the experts were wrong, and it was all a load of hot air. But in actual fact a lot of people behind the scenes worked very hard to make sure it didn't become a problem.
  • gcp 10y ago
    Y2K doomsday etc. Wasn't it expected that the markets would rise as soon as uncertainty about Trump started dropping off? Market pricing tries to look ahead.
    • coldtea 10y ago
      Was it expected that "uncertainty about Trump would drop off"? And in 1 week or less?
      • gcp 10y ago
        He did make a 100 day plan.
  • jfabre 10y ago
    Who worked behind the scene after the election to make sure that the economy doesn't crash?
    • deleted 10y ago
      [deleted]
  • coldtea 10y ago
    >But in actual fact a lot of people behind the scenes worked very hard to make sure it didn't become a problem. Even more worked harder to sell useless drugs for the epidemic.
  • PJDK 10y ago
    I don't understand how the analogy stands? The warning was if [Brexit/Trump] then bad market outcome because those things are intrinsically bad. It's not a bug that can be fixed - it's a situation to be analysed. Not only that but the bad impact was one of the given reasons to not do the thing in the first place. "A Brexit vote might cause some problems but they are fixable" is a pretty different message to "A Brexit vote will cause an instant recession".
  • crusso 10y ago
    I agree that there was a bird flu effect that you describe. Likewise, I always point people at Y2K as being a case in point where a lot of hype created the work that deflated the danger - but lay people could only see the hype. That said, who worked to make sure that the market didn't crash after Trump got in office?
• jcfrei 10y ago
  Brexit is a bad example because the predictions were accurate. If you are a foreign investor (your main currency being something other than GBP) and invested in the FTSE then the loss on your GBP was higher than your profit on the index. Slightly different story for UK based investors: While you made a profit on your FTSE ETF, those gains will to some extent be offset by a rise in inflation. Stocks are in general a good protection against higher inflation - which is exactly what is happening in the UK.
  • 0003 10y ago
    To say nothing of the non-UK businesses who sold goods/services for GBP.
  • 1337biz 10y ago
    They were not. https://en.wikipedia.org/wiki/Opinion_polling_for_the_United_Kingdom_European_Union_membership_referendum#2016 https://en.wikipedia.org/wiki/Opinion_polling_for_the_United...
    • jcfrei 10y ago
      I was referring to the predictions about market impacts.
• tgb 10y ago
  I'm just a little confused about this though. If everyone thinks the market will decline due to Trump, then doesn't the market actually decline? What I'm saying is that apparently there were even more people making the opposite guess.
  • celticninja 10y ago
    Irrational market.
    • DrPhish 10y ago
      Without trying to be snarky, this sounds like a post-hoc rationalization. How do you differentiate between an irrational market and a bad prediction? I'm honestly at a loss
      • celticninja 10y ago
        I don't have an answer to that but I bet no one does regardless of whether you are an expert, trader, president or man on the street.
      • jackmott 10y ago
        the prediction is still bad. if the prediction can't predict that the market is irrational.
        • jakeogh 10y ago
          nonsense. The people making the predictions were just wrong.
  • cderwin 10y ago
    Or a Trump victory was already priced into the market -- it doesn't necessarily mean people weren't bearish on Trump.
  • mattnewton 10y ago
    My theory is if you have real tradeable info/models that is worth more than ads on a blog you keep your mouth shut until the trade is done.
• jknoepfler 10y ago
  And here we are, invested in index funds, outperforming the hedge funds again...
  • forgetsusername 10y ago
    Bingo. So many macroeconomic prognostications in this thread, none of which will be correct. The fact that "smart hedge fund" guys are making stupid bets on a market crash is hilarious. Put money in diverse holdings and let it compound. It's not hard.
  • loafa 10y ago
    Hedging is about protecting your downside. 100% long funds like your index fund may do well in a rising market, but when the market declines you may find yourself wishing you had a hedge fund instead.
  • nemo44x 10y ago
    I wonder about an index fund bubble. I am mainly using them too but if everyone is and continues to you wonder if it gets too crowded?
• akhilcacharya 10y ago
  Just wait until he's able to pass his 35% tariff.
• problems 10y ago
  I think we're really yet to see on both these things, markets usually recover from over-reactions quite quickly, so while we did see those immediate slumps, they did recover. However, in the longer term, the market will adjust to Trump and Brexit accordingly as actual decisions get made and impacts are felt, it's difficult if not impossible to predict what these might be with any degree of accuracy, one could speculate but ultimately there's just too many moving parts. I'm not sure I'd promote Bogleheads in specific, but the general theme of passive index fund investing is a good one to make. If you don't want to take big risks or pay big fees, that's the way to go - that's what I do at least.
• samfisher83 10y ago
  We won't know what Trumps policies do until 6 months to year from now.
  • crusso 10y ago
    Even then, some policies take years to show an impact - often with amplification or diminution based upon other events that occur long after a President is gone. Look at how long it took for the housing market bubble to grow before bursting - 15 to 30 years, depending upon which policies you view as being contributing factors.
• pllbnk 10y ago
  Markets don't crash from one independent event or even a few events. I think history has shown that. However, any event may act as a catalyst for starting a chain reaction for a series of financial events each directly responsible for the following one.
  • MrMundials 10y ago
    Could not disagree more. You should actually read some history. https://en.wikipedia.org/wiki/Black_Wednesday https://en.wikipedia.org/wiki/Black_Wednesday
• badloginagain 10y ago
  It takes a long time for economies to correct to a President's actions- on the order of years. It's better to judge a President's effect on the economy at the end of their tenure than at the beginning. It's also been shown that the President has less affect on the economy than people's perception would have them to believe.
  • debt 10y ago
    If that last part is true then we're in for a correction.
  • dominotw 10y ago
    > It takes a long time for economies to correct to a President's actions- on the order of years. Those predictions were for short term effects.
  • SonicSoul 10y ago
    Exactly this! so sick of people using this as some kind of proof achievement. All it means is that financial companies (i.e. banks) are expecting deregulation and are bullish on ability to make money in the volatile environment to come. It has no connection to any macro economics that will be impacted by his decisions being made today.
  • jonwachob91 10y ago
    >It's also been shown that the President has less affect on the economy than people's perception would have them to believe. You're thinking pre-Trumponomics. The president causes billions of dollars to disappear into thin air with 140 characters. He has a real and measurable impact on the economy, for good or bad. >It takes a long time for economies to correct to a President's actions- on the order of years. It's better to judge a President's effect on the economy at the end of their tenure than at the beginning. I'm not certain you completed your statement... The OP was about "experts" being unable to time the market. If it takes years for the market to correct, even if the underlying assumption about a market crash is correct, you have to time it properly. Otherwise you'll take years of loses to make the same off the crash as someone who placed their bets moments before the crash.
  • deleted 10y ago
• xenadu02 10y ago
  We love to overestimate the short term impact and underestimate the long term impact of events. Brexit probably will have large negative effects on the UK's economy... but it will take a long time to figure that out. Some of Trump's policies are also likely to do long-term damage, but not in the short term.
• scott_s 10y ago
  Brexit hasn't happened yet. The vote happened, but the U.K. has not yet left the E.U.
• ErikAugust 10y ago
  Mainstream financial analysis is junk. If you knew what a market would do - you wouldn't share it with everyone for free. You may, however, attempt to manipulate some market through these means.
• rdtsc 10y ago
  > Remember when nearly the entire business media predicted that if Trump was elected the stock market would crash immediately? It was rather amusing yes. I stayed up late during the election night watching NBC (it is my new comedy channel, alongside Fox and friends). So after showing a blue map for months reporters were in disbelief and shock, almost in tears. That didn't last long. Because around midnight or so the mood lifted. It looked like after-hours trading and overseas markets were headed down. So just like that the sadness turned to optimism and they printed out a few graphs (because as we all know if it is printed on paper it becomes official) and were telling people how they were right, they predicted a massive crash. There were insinuation of people losing all their retirement money. Etc, etc. The amusing (or tragic, of course) part is after failing to predict the outcome of the election, they turned right around and with the same confidence were talking about a total economic disaster. Of course market shot up even higher next day than before. It is interesting that they would rather want a total crash of the market justify their prediction of Trump.
• PaulRobinson 10y ago
  Well, hang on. Firstly, Brexit hasn't happened yet, and nobody knows the plan. Every time the PM asserts something about where we're headed plan-wise, the markets tank. Once Article 50 is invoked, you'll see GBP slide and FTSE will get... interesting. Because a lot of the FTSE is made up companies with a lot of different EU dependencies, it's hard to call where it's going to go. But it's not likely to be good for most investors. As for Trump and the stock markets? Well, suggesting an "immediate crash", that was silly. Right now though, the US is in the same place as the UK is with Brexit: nobody is quite sure what's about to happen. He's made a lot of promises that he might not actually be able to keep. If he does, it's likely to cause some serious mayhem in the markets. Not least: he's specifically said he wants to devalue the dollar. Just let that sink in for a minute: the sitting President of the United States of America got into the Oval Office by promising to lessen the dollar's buying power and value. The hope then is that this will make US shares more favourable to overseas investors, imports more expensive promoting internal trade (and therefore jobs), and therefore US business more worth overall. Will it work? Who the hell knows? None of us. And that's why it's too early to call those predictions of decline, wrong.
• drawkbox 10y ago
  To be fair, historically at all presidents changing, markets get volatile and usually dip a bit mainly based on the uncertainty. Change typically leads to volatility in the markets so it wasn't a bad move to bet on it. The market has been in a steady climb for 8ish years and had been sideways for nearly a decade before due to the internet bubble and mortgage/housing/banking based Great Recession from 2008, so it was more robust on a bounce off that massive dip. Trump inherited a very low volatile market. Flipside is Trump is coming in on record highs, other presidents come in on lower than highs usually due to the change/uncertainty, may lead to a lower total increase over 4/8 years. The last two presidents came in on huge dips/volatile markets, internet bubble busting and housing bubble/fraud in 2006-8 leading to Great Recession while wages stagnated the whole time. This market still has fuel in it as it is still bouncing from those. I am sure we will see some dips coming from the interest rates going up. No policies or interest rate changes have happened just yet to stop the bull. Side note, typically Republican presidents have a lower overall performance on the markets[1]. [1] http://www.forbes.com/sites/peterlazaroff/2016/07/26/democrats-vs-republicans-who-is-better-for-the-stock-market/#68138cf25bfb http://www.forbes.com/sites/peterlazaroff/2016/07/26/democra...