Especially with today's valuations, Trump could cause a major correction with any of the following policy moves:
1) Institute tariffs with Mexico, China, etc. The result would be the first major uptick in inflation in many years. The corresponding rise in interest rates would impact the stock market. (As you know, stock valuation is a factor of the risk free rate).
2) Start a shooting war with Iran, North Korea, etc. that would harm consumer or investor confidence.
3) Interfere with the functioning of the Federal Reserve or the mortgage system. This could wipe out investor confidence.
4) Do/tweet things that start a period of serious racial/political riots, insurgency, and unrest that would damage consumer confidence and decrease the value of real estate in cities.
5) Fail to produce a budget for long enough that the US defaults on debt payments and loses its credit rating.
These risks are new and unique because never before has an actual sitting president been foolish enough to endorse such policies. They are mitigated somewhat by his conflicts with his own party in Congress and his tendancy to spend a big chunk of his time golfing and firing syncophants. It is hard to predict which, if any, of these disasters will hit, but there is a good chance that one of them will within the next 7 years of Trump's presidency (yes, count on two terms). So no, I don't think it's market timing or news-driven investing. These are actual, long-term risks that could end many a FIRE dream.
What I'm doing:
1) Staying 100% invested. I've lost more on "sidelines cash" over the years than I did in 2008!
2) Learning about options strategies such as collars and protective puts that I may employ at a relatively low cost that would partially or completely hedge my portfolio. Slowly moving entire stock allocation to SPY for the improved options market compared to Vanguard ETFs.
3) Investing time/energy into my home so it could sell, if necessary. In truth, I need to eventually do this anyway because I think I want to downsize in order to accellerate FIRE. If it becomes a truly SHTF situation, I'll need the extra liquidity and the option to walk away from a smaller amount of home equity - ideally 20% of not much instead of 30-40% of a lot.
4) Pursuing education and certifications. This may be what keeps one employed after SHTF and it also helps if one decides to emigrate somewhere in the event the US becomes a Turkey or Venezuela like basket case situation. (Note that democratic republics routinely descend into dictatorship or chaos.)
5) Developing a plan to increase my portfolio risk during a transient crash like 2008/2009. When pessimism gets bad, I want to change from my hedged SPY portfolio to a leveraged bullish portfolio - if I can muster the guts to do it this time! I might do so through buying highly leveraged companies, distressed bonds, LEAP call options on SPY, or simply the companies likely to recover the most (leisure and entertainment, tech, highly leveraged firms, takeover targets).
6) Get physically fit. The near future may involve harder physical labor, more walking/biking, an increased importance of being disease resistant, and threats of violence. You don't go into such a scenario flabby, dependent on sugar/caffeine, dependent on meds for preventable conditions, diabetic, addicted to luxury, etc.
7) Renew my passport.
IMO, most ideas espoused by MMM with optimism also make sense in the pessimistic scenario. Throw in some protective moves (like options and high home leverage) and you have a robust survival and FIRE position.
