Investors could be overplaying the election as a lasting driver of the stock market, history shows

Elections rarely prove to be instrumental inflection points for economic or market cycles.

U.S. President Donald Trump speaks to reporters during a news conference in the Brady Press Briefing Room at the White House in Washington, September 18, 2020.The presidential election is the next known major event ahead of the Wall Street.

Sure. But one reason to believe the election is overplayed as a decisive and exploitable market swing factor is that investors always overplay elections – and they rarely prove to be instrumental inflection points for economic or market cycles. Think the prospect of capital-gains tax rate hikes under a President Biden would kneecap stocks? Maybe there would be a flurry of front-loaded selling. But cap-gains tax increases in 1986 and 2013 did not derail strong bull markets.

But the difference is between a median 3% gain and a 0.6% loss, hardly a vast performance gulf. And with only a few dozen presidential elections since modern markets existed, does the market experience under the various outcomes and party arrangements even offer a level of statistical significance that should dictate investment strategy?

Which raises the question, if institutions are already well-hedged and clenched-up in anticipation of the vote this far ahead of time, will a result, any result, not trigger a tension release?But what about an unresolved or disputed result? It would make sense for this to keep market anxiety elevated for a time. Goldman Sachs last week noted, "The markets' expected one-day move on Nov. 4 [day after Election Day] has fallen from 3.2% in mid-August to 2.

Not only has Trump failed us on his response of mishandling the pandemic but, also his failure to keep people who lost their jobs because of COVID having steady income that they need to get by during these challenging times.

I have been through 7 presidents, Democrat and Republican. Portfolio has risen in all of them. The markets have always figured it out. Vote you heart not your wallet.

Funny you would call speculation in the stock market investing.

THE STOCK MARKET IS NOT OUR ECONOMY

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