Last week was the end of election uncertainty, right? Hardly. Instead, the election outcome brings just a new phase of uncertainty for long-term investors.
We witnessed this whipsaw price action last week. Tuesday night, when Donald Trump's electoral path to the White House was becoming clear, stock futures took a dive. At one point, S&P 500 futures fell 5 percent. They couldn't fall any more because the exchange puts a timeout in place after a drop like that. But by Thursday close, the index had regained that and more. And the less-meaningful Dow Jones Industrial Average hit a record high.
Forget about politics. It's understandable if an investor is filled with financial anguish and anxiety over these kinds of wild swings.
Remember the stock market puts a price on hope and fear. In the week ahead, that pendulum is likely to continue swinging between extremes.
Donald Trump's election as president of the United States was the successful culmination of an unconventional campaign, to say the least. Now begins the real uncertainty _ a Trump administration.
His outsider status got him elected. His promises of better trade deals got him elected. His crude approach to policy got him elected. His lack of a political track record was an asset. For the most part, Trump shunned the usual campaign position papers spelling out complex policy goals important to investors _ job growth, trade relations, taxes, et cetera. Instead, he found his voice (and his voters) with big proclamations mostly devoid of the nitty-gritty details.
Now markets across the globe are struggling to put a price on that future. If Trump governs the way he campaigned, that will leave the markets and investors guessing for certainty.
