We have covered this topic extensively leading up the the election, but here’s one more viewpoint. Some investors may consider making changes (sometimes drastic) to their investments in the month before or after an election. There is an idea that if Trump wins “ABC” will happen and if Biden wins “XYZ” will occur. In reality, the effects of a democratic vs republican president are hard to determine. There is no clear (or viable) trading strategy that someone can implement to earn higher returns based on the who is in the oval office. See the attached chart that shows monthly returns for the past 100 years or so. The “election months” are highlighted blue or red depending on who was elected to office. As you can see, there is no clear pattern.
Today’s election lesson: Vote with your ballot and NOT with your investments. Investors should have a long term investment plan and stick to it regardless of what party is in control of the white house or congress.
And be sure to vote next week:)