A well known voice in the world of financial markets said that the stock market at 20,000 (the Dow Jones) is where it should be at because the market is anticipating the pro growth policies of the in coming Trump administration. The market, he assumes, is forward thinking.
The market has no consciousness. It does not think. It has no awareness. It does not know anything more about the future than an earthworm.
The market goes up or down on one main thing. If more money is flowing in to buy than to sell, the market goes up. If not, the market goes down. Sentiment may drive cash flows, but sentiment, like cash flows, cannot predict the future. In recessions, markets tend to go down as there is less money to invest and for other reasons. If there is no recession, markets tend to go up. The market does not know whether Trump will be good or bad for the country, the economy, or the world.
People attribute to financial markets things they do not possess.
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