Interpreting Market Chatter In The Trump Era

The Wall Street Journal – After 100 Days of Trump Presidency, Advisers Say Client Worry Has Eased
‘No one is telling me, “I’m afraid of Trump,” at this point, as far as their investments go’
In the aftermath of Republican Donald Trump’s surprise presidential election victory and the run-up to his inauguration, many wealth managers and investment professionals were inundated with calls from clients both concerned and looking for ways to capitalize. Now, as Mr. Trump arrives at the 100th day of his presidency, financial advisers say those calls have subsided and clients’ outlook has moderated. Some clients who feared what a Trump administration might mean for their portfolios are calmer now, realizing that his presidency hasn’t dragged down the stock market. Others who had hoped that Mr. Trump and a GOP Congress would quickly pour money into infrastructure and reverse years of regulation now realize that they may have been overly optimistic. “We had clients calling all day, every day, right before and after the election, just very concerned, whether they supported him or not, very concerned about the uncertainties,” says Nicole Kianka, a financial adviser at Wescott Financial Advisory Group in Philadelphia, which manages or advises on roughly $2 billion in assets. That occurs with every election, but was more heightened this time due to the election’s divisiveness, she says.
The Wall Street Journal – Jason Zweig: Whatever You Do, Don’t Read This Column
Investors have a hard time looking the truth square in the face
The efficient market hypothesis holds that stock prices fully reflect all the relevant information that is available. What if, instead, investors are so efficient at avoiding some information that it might as well not even exist? Psychologists call this behavior “information avoidance.” You could also call it intentional ignorance. “It’s a motivated decision to say ‘no’ to learning available but unwanted information,” says Jennifer Howell, a psychologist at Ohio University in Athens, Ohio, who studies the phenomenon. “People avoid information if it’s going to make them feel or behave or think in a way they don’t want to” — especially any evidence that could jeopardize their belief in their competence and autonomy or could require taking difficult or prolonged action. After all, information isn’t just bits of data or trivia. It can also be the cause of pleasure or pain. If the information is pleasant, that positive feeling gives you more incentive to pay attention to it. Painful information can push you to ignore it.
The Financial Times – John Auters: Mr Market learning to tell Trump’s bark from his bite
Optimism is dwindling but the belief remains the president will not harm progress
Nobody should ever attempt to judge an investment over a period of just 100 days. It is far too short a time to assess the quality of performance and far too prone to random effects. And in any case, most of us need results over very much more than 100 days. It is therefore a little random to be judging the Trump presidency’s impact on investors after only 100 days. Add to this that the impact of a president over securities prices is limited (he is much less important than the chair of the Federal Reserve) and only comes with a lag, and the exercise seems even sillier. Finally, note that as in all investments, the opening price is crucial. Judged by the stock market, Barack Obama was arguably the greatest president ever but that had everything to do with his taking office near the bottom of a bear market.