Just what is the crazy-like-a-fox President-elect of the U.S. up to? His antics would make P.T. Barnum blush with admiration. Mr. Trump has created a spectacle of showmanship on a scale unequaled at any place and at any time in the past. His millions of voters are more Pavlovian than a 50-dog act. And his detractors are as puzzled as they are livid. Let’s step back and take a look at the history leading up to this circus. Perhaps this can provide us with some hint on what to do next, before the lions are released into the cage with us.
Conventional wisdom has it that political trends are a key determinant of the stock market’s gyrations. As an election approaches, commentators endlessly debate the effect the outcome of the election will have on stock prices. Investors weigh up which candidates will influence the market to move up or down. Statements like, “If Jones is elected, it will be good for the market, but Smith’s election will cause stocks to tank” are common.