Thursday, November 10, 2016

What Hasn't Happened

The financial markets didn't fall through the floor.

Some have argued this means the markets like Trump's plans better, but that's like arguing that the Loch Ness monster's eyes are bluer than the Abominable Snowman's. In reality, all that the the markets have known for months is that one of these train wrecks would be president, and that there is less difference between them than either would have anyone believe. It was easy for the markets to prepare for 95% of what lies ahead regardless of the election's outcome. That was all they needed to know.

As for the other 5%, that's why investors hedge.

Under the Constitution, presidential elections are scheduled millennia in advance. Nominations are finalized months before any new appointments or policies will be implemented. It's unfortunate that this would have any effect at all on the economy, since the Framers intended otherwise, but the markets have had generations of practice at anticipating anything and everything that can be anticipated. They are susceptible to surprises and shocks, but elections don't qualify.

When you know what's going to happen and have the time and the know-how to prepare, panic is impossible.

Unless you're personally making all of your financial decisions, and are a complete idiot. Some of the former are not the latter, but most who are not the latter are smart enough to also not be the former.

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