Companies Need a New Approach to Investing This Election Year

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In the U.S., it’s normal for policy uncertainty to increase before a major election, then decrease once the results are in. In any other election cycle, the predictable increase and decrease in uncertainty offers shrewd managers unique opportunities for operating, investment, and financing decisions.

Election years are the time to pursue projects that entail minimal commitments and expenditures but will produce tremendous first-mover advantage and large payoffs if post-election policy turns out to be favorable. This year, however, is different. The authors explain why and outline several considerations for company leaders planning their investment decisions., which typically reverts to lower levels after the results become known.

is an assistant professor at the Trulaske College of Business of the University of Missouri. His research revolves around financial economics and macroeconomics and has been featured in venues such as Bloomberg and The Washington Post. His private sector experience includes the aerospace and financial services industries.holds Canada Research Chair in Accounting, Decision Making, and Capital Markets and is a full professor at Haskayne School of Business, University of Calgary.

 

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