Investment Insights: Our Election Investment Handbook
Behavioral finance shows us that investors are always worried about something. The election gives those investors a new reason to do so. While politics has become more tribal than perhaps ever before, the intent of this report is exclusively on the investment aspect of this election cycle. Many have strong views of how the world should be. We focus on the reality of what is and possible outcomes. To borrow from a famous Greek philosopher, Epictetus:
“The chief task in life is simply this: to identify and separate matters so that I can clearly say to myself which are externals not under my control, and which have to do with the choices I actually control.” – The Discourses, Book 2, Chapter 5.
This report is broken down into four sections. First, we take an historical view of markets, dispel some myths and provide constructive context to what could be. Second, we examine the role of uncertainty as a driving force of short-term market performance around elections. We then describe the high-level difference in various policies and election outcomes and review what’s most important and likely. Lastly, we highlight some portfolio implications.