Home Forums Members Forum Stocks near an Election Reply To: Stocks near an Election

Sean HymanSean Hyman
Keymaster
Post count: 3945

Elections are always unknowns and if there’s a place where Wall Street usually figures it wrong, it’s around elections. Case in point, you’ll recall that when it was seen that Trump was going to win the election, that the market thought the bull market was over and that Trump would be bad for the market. Well, they couldn’t have been more wrong.

Also, central banks affect markets even more than presidents. So Fed policy matters the most.

Either one that wins, inherits a grossly overvalued market and can’t likely stop the downturn. Obviously, I’d prefer a Trump presidency. And at this point, its likely the market would as well. Why? Markets usually are more comfortable with what they already have rather than something new. So markets tend to like a 2nd term of the same president than a new president coming in before the former one completed their potential 8 years.

My biggest concern with a Biden presidency is that he’s been open about saying he’d shut the economy down again “if the scientists told him to do so”, which means….anyone above him pulling his strings with the right about of money or influence can essentially order the entire country shut down again. That would be horrible for the economy and also, I believe, the stock market as well.

But we don’t buy or not buy…sell or not sell based off of who’s in office. If we did, we’d become fickle. Instead, we go off of a system that’s always measurable, no matter the presidency. It’s all numeric-based.

Now…I will admit, I’m holding off on an investment in a vacation rental property in Florida (for another stream of income) until I know who wins the presidency. I don’t want to plunk down any money until I know that outcome, since we’re so close to it.

I doubt Biden wins, but if he did, I might rethink that since he’s got such radical thoughts of shutting the entire economy down again. When the country was shut down the first time, Trump/Congress listened to Fauci. They didn’t know what they were dealing with. They do now. Trump says he wouldn’t allow the economy to be shut down again. Biden has said he would very much be open to that.

Shutting down the economy would only exaggerate the divide between the rich and poor and between big-business and small-business. Big-business has a massive online presence, so they can still operate and have less overhead. Small-businesses usually don’t have a household name and nearly as much web traffic to their online sites and can be more dependent upon physical locations.