Such a diverse set of possible outcomes leaves much unknown for the market, investors and advisors. All the uncertainty makes for a breeding ground for potential big winners and losers among market timers and prognosticators. A prognosticator has the easier job. He can make a bold stance with a particular prediction, and, if wrong, can always come up with an intelligent reason for a forecast falling off target. Soon enough, people will forget. When a prognosticator hits a pick correctly, he enjoys the limelight for awhile. No real risk there. 

Those trying to time the market stand to either pay dearly for the wrong bet or to hit it big like those who bet against the housing market in 2008. But over time, I am firm believer returns regress to the mean. A majority of Americans are not trying to time the market. They are focused on capturing that return needed to accomplish their goals. To protect what they have while understanding that they do need their investment to grow enough to keep up with inflation and build lifetime assets.

Within that scope, are there still some things that investors can “do now?” Many might look to hedging against inflation, which isn't always simple. Is the hedge long or short term? How much risk are you willing to take? Stocks can be a very effective long-term inflation hedge. Gold and commodities, along with Treasury inflation-protected securities, can also provide hedges.

While trying to outsmart the market can be perilous, investors willing to place bets will want to look at companies in pharmaceuticals/biotech, defense, energy, banking and infrastructure, based on where regulations and federal spending appear to be headed. Tax cuts will benefit many sectors, but those that already have high tax exemptions and deductions such as REITs and utilities stand to benefit less.

But by and large, what an investor or a good advisor might do now shouldn't differ much from what they have hopefully been doing all along as they plan for their financial future. Planning should not be reactionary to the market, politics or prognosticators, and most definitely not tied to emotions. A good advisor always assists the client to plan for uncertainty. Planning ought to be diversified in terms of asset classes and in terms of contingencies for factors that can affect financial markets. Anyone whose plan doesn't yet do that will want to take stock of the following:

  • Short- and long-term goals

  • Times frames for these goals and assets dedicated to accomplishing them

  • Risk tolerance of short-term and long-term market gyrations

  • Diversifying the assets allocated to each short-term and long-term goal

  • Consider possible hedges against inflation