Over the past several weeks, many commentators have opined on how the stock market would react to Donald Trump winning the general election and becoming president of the United States. The latest notable prediction came from Dallas Mavericks owner and TV personality Mark Cuban, who said that “there is a really good chance we could see a huge, huge correction” in the event of a Trump victory in November. But before investors make changes to their portfolio as a result of these predictions, they should consider the following three points:
1. Markets have already priced in the possibility of a Trump presidency.
2. Two-step forecasting is difficult.
3. Your political beliefs can lead to investing mistakes. (more…)