The Folly of Forecasting

Heading into Election Day, the consensus was that Clinton would win the presidency and preserve the status quo. The media turned out to be extremely overconfident in a Clinton victory, despite the very close polls. Most market participants expected a Trump upset would be negative for risk assets, such as stocks. As we all know, the consensus projections and expected impact were incorrect, which speaks to the difficulty of both predicting future events as well as market correlations. Of course, this has not stopped the prognosticators. Despite the incorrect predictions before the election, political commentators and market strategists are still at it post-election. As always we advocate preparing for all scenarios, not just predicted or likely ones.
“There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.” -John Kenneth Galbraith
“Prediction is very difficult, especially about the future.”  -Nils Bohr
“I don’t read economic forecasts. I don’t read the funny papers.” -Warren Buffett