Plenty of ink has been spilled by pundits, economists, portfolio managers, strategists and the financial media about what President Donald Trump’s economic plans, cabinet selections, trade talk, fiscal policy and other ideas will mean for the markets. Some see the Trump rally since early November as a sign that investors believe his policies will be market-friendly for the next four years. Others see the surge -- part of the eight-year long bull market -- as little more than a sugar high and predict Trump is likely to crash the markets through policy mistakes or a poorly worded tweet.
Yet it would be pure speculation at this point to forecast whether Trump will cause a boom or a bust in the stock market. Either is always a possibility, but in the stock market, risk is typically much easier to predict than returns. Returns are promised to no one, but risk is ever-present.