Don’t Make Rash Decisions Due to Election Uncertainty
Regardless of who wins, long-term investors should remain focused on the economic recovery.
While the next president is still unknown, past experience offers valuable perspective on how either outcome will likely impact markets.
In the near term, market volatility might remain high as traders try to game intraday momentum on each new headline. However, for investors with a long-term strategy, we think the winner is less of a market catalyst than the economic recovery. Over the next few quarters, economic activity will be more influenced by the timing and efficacy of a vaccine for the coronavirus than a potential change in administration. Although there is always a lot of focus around the U.S. presidential election, we have found that the subsequent market returns for the three years after the election are determined more by the broad economic trends in place than by whichever political party is in power.