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December 27, 2016 at 07:00 PM
The changes in the White House and Washington, D.C., this year are likely to bring an interesting mix of opportunities and challenges to financial advisors and their clients—as well as to the journalists like me who follow the industry.
Living in California (aka one of the bluest of the blue states), I have to admit I was slightly surprised by Donald Trump’s victory, but only slightly. I listen regularly to DoubleLine Capital CEO Jeffrey Gundlach, who keeps on top of the latest research and thoroughly explains where current economic and financial numbers/trends are heading; he predicted a Trump win.
Though I love to follow statistics (and one of my sons is considering a career in the field, like his father), I suffer some of the same biases as others and sometimes see the probabilities of a likely outcome as “just a number.” In other words, I don’t see the probabilities as “real,” according to Israeli psychologists Daniel Kahneman and Amos Tverksy, the subject of a new book by Michael Lewis.
As advisors know, numbers—including those related to trends and even hypotheticals—are indeed very real. Thus, we have to take them seriously and adjust both our thinking and our actions accordingly.
