"Winners and losers will be impacted by policies created by the Trump administration's actions and the world's reactions to them," Loeb said. "While the markets have moved since the election, we do not believe that investors have digested how different things will be."
The activist said markets will continue to do well if the administration fulfills its promises, while wages continue to rise and overall growth picks up.
Other market strategists have also said that 2017 is the year stock picking, or active money management, can increase investment returns after suffering amid a shift toward passive investment.
The president's proposed changes have already driven a shift in terms of which segments of the markets are doing well.The financial sector extended gains to reach highs not seen since before the financial crisis.
On the other hand, bets on very low Treasury yields and better returns from so-called defensive sectors such as utilities began to reverse. Utilities are down 1.5 percent since the election as the worst performing sector in the S&P 500, while financials are up 16.7 percent as the top performer.
But for the new president, Loeb said, "it will be tough to #MAGA [Make America Great Again] if the stock market is faring poorly. This is not a simple task."