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Posted by EconMatters

With a team of analysts, we at EconMatters focus on identifying the fundamental theories of cause and effect in the financial markets that matters to your portfolio.

Market Psychology and Sheep Herding (Video)

by EconMatters on December 12, 2016

in Economy, Stocks, Videos

By EconMatters

We delve into Market Psychology in this video. It is interesting that all the positive aspects of a Trump Stimulus program are being priced into financial markets. However, more organic growth fueled by spending more and infrastructure projects, also means higher interest rates, higher borrowing costs, less Fed Loose Monetary Policy, and lower stock buybacks. All of which have been the primary drivers for asset prices over the last 8 plus years of ZIRP, now all those negatives will have to be re-priced into financial markets.

Donald Trump is likely to exacerbate any crisis during his tenure as President due to his enormous ego, lack of impulse control, and need for attention. The writing is on the wall just looking back at his past behavior, just wait for the first crisis and watch its effects on financial markets volatility. It will be like throwing gasoline on a fire. There is a lot of bad baggage that comes with a Trump presidency, and markets will eventually get to experience this side of the coin down the line.

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