Commentary

Commentary 2017-01-10T23:32:45-08:00

Regarding how elections may affect investments I expect that whoever wins the presidential election that they will need to move to the middle during the final month of the campaign to be a candidate of compromise. Thus investors should not dread the outcome of the election. With the Senate’s filibuster power and the Supreme Court’s relative ability to contribute to stability the risk of dramatic changes in the political climate is not a key risk for investors.
The biggest risk to investors in this election year may be that they get emotional or continue to be emotional and end up getting fooled by bubbles and hurt themselves rather than get hurt by politicians. Investors need to be on guard against the risks of self-delusion so as to excel at avoiding the excessive and uncompensated risk caused by bubbles. A key principal in investing is to avoid losing money which means in part to be alert for the risks of bubbles and to avoid them.