As each year ends, I try to pause and reflect on some of the year’s themes and how poorly I predicted them. The goal of this exercise is to relearn some of the lessons we relearn every year: Mainly that nobody, including myself, has any idea how macroeconomic and sociopolitical events will play out, nor how they will affect the markets. The best we can do is predict that past inertia will continue into the future – e.g. the stock market will return about 7.0%. We know this is an illusion since, within any chaotic, complex system, inertia is ephemeral at best, but it’s a nice illusion.
The story of the 2016 election centers around the unconventional, unprecedented rise of Donald J. Trump. Last night, with no elected office experience, a grab-bag of policy ideas that reflected neither party’s establishment, and a complete disregard for political correctness, Donald Trump attracted some 59 million votes and was named president-elect of the United States of America.
This has left many on the left in a state of panic and disillusionment. They feel that the election of Donald Trump marks the end of tolerance, diversity, and progressive ideals in America. On top of that, with the republicans winning both houses congress and multiple Supreme Court nominations in the balance, they feel that this might also mark the end of Democratic Party influence in government. This is probably an overreaction.