News Flash – Election Results and Investment Implications
For months we have been discussing possible election outcomes and what will happen to the markets depending on who controls the Senate and the White House. We have been emphasizing that caution is warranted when trying to decide an investment strategy based on who will win these contests. We have heard many questions, such as should an investor exit the markets or make other major changes before the election to prepare. We told clients who asked us these questions that history suggests that there is no clear way that markets perform under one party versus another and that elections usually don’t make a huge difference in terms of market performance. We don’t have a crystal ball over what the final outcome of the election will be but what seems clear is that what we had been saying going into this about the markets has held true. The markets were up in the two days prior to the election as well as the election day and the futures are up this morning.
If we had asked most people what result they were the most concerned about it would have been the current outcome which is that there is no clear winner as of the writing of this posting. We don’t know when this will be resolved as results look very close in several states: Nevada, Wisconsin, Michigan, Pennsylvania, and Georgia. It could possibly be up to a few weeks for final results to be known depending on if the campaigns want to dispute the final tallies in the states where the end result could only be separated by a few thousand votes. The beautiful thing about the financial markets is that they are very resilient to events and have functioned through wars, famines, epidemics, terrorist attacks, and many other events. This isn’t to say that they are always up but in general people are able to get a price for assets that they want to sell and the market as a whole continues to function more or less normally.
We hope that the election results haven’t been keeping you up in regards to your finances. This is why we have constructed portfolios to try to match your goals and needs while limiting the downside, for anyone that is not in are 100% equity portfolio. This is why we have diversification and have exposure to foreign markets as well as the U.S. We know that there will be challenges ahead but with a diversified portfolio and an understanding of your individualized cash flow need we can get through adverse times.
If you have any questions about your portfolio positioning please reach out to a member of our team. If you are not currently a client of River Capital Advisors and would like to discuss your current portfolio and/or financial planning, please contact us.