Since Trump won the U.S. election, markets have been flying higher without pause for breath. The Dow, for example, is up 9.7% and recently broke the 20,000 barrier. Trump is probably one of the most eccentric presidents the U.S. has ever deigned to elect, and poses major risks to trade, multinationals, and the world order. But investors seem to prefer to focus on the mooted tax cuts, infrastructure investment, domestic job creation and a few other bold promises.
As a consequence, the VIX, which roughly measures investors' fear levels, is currently at a level not seen since July 2014 and very near record lows. When optimism is running high at a time when global challenges are so huge, I'm not really comfortable being long in the market. When everybody is optimistic and ignoring the risks, a potential mini crash is more likely, because a sudden setback can catch everyone off guard and start a panic.
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