Why November 3rd Might Be Anticlimactic:
Unlike most presidential elections, we may not know the winner of the 2020 vote on election night. Changes were made to provide more flexible absentee voting, so counties will need time to count those votes (at least 13 states allow absentee ballots to be counted if they’re received the day after the election).
The U.S. Constitution sets deadlines for the election of the president and vice president. Federal law requires that we have a president on Inauguration Day, but there may be legal challenges along the way.
The Stock Market Has Seen A Contested Election Before
The rhetoric leading up to this election has suggested that this election may end up being contested. In a pandemic year where ballots will be forced to be delivered at poll drop-offs and via snail mail, either party might contest the results. However, this is certainly not the first time we have seen a contested election in recent history.
Remember Al Gore and the Florida recounts?
That was quite the debacle. History can help us see what the future might bring us, especially when it comes to the stock market. With a likely contested election year, one might be concerned with how the stock market will react.
Undoubtedly the stock market will experience some short-term volatility. However, as shown from the 2000 election, it was relatively muted and reversed course to the positive shortly after.
It’s important to focus on why you are invested, as opposed to how you are invested when faced with volatility. As the old adage goes, it’s “time in the market, not timing the market”.
In next week’s blog, we will take a look at what we will see in terms of two very important topics with Biden or Trump at the helm; Healthcare and Tax Legislation.
As always, I’m here to help in any way I can. Let me know if you have any specific questions or concerns and I’d be happy to guide you.
Disclosures:
Asset allocation does not ensure a profit or protect against a loss.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.