As we all know, the Presidential election is coming up next Tuesday. The intensity of this political battle between Donald Trump and Hillary Clinton, along with the 24 hour news cycle, have both contributed to a sense of volatility and uncertainty that has exceeded past elections.
The financial markets have taken notice, as we have seen a sharp rise in volatility and a moderate decline in stocks in recent weeks. The uncertainty and intensity of the Presidential race is likely responsible for the stock market’s recent woes.
We don’t pretend to have a crystal ball regarding the upcoming election. From all accounts, it appears to be a fairly close race. While we can’t know the outcome next Tuesday, we do want to communicate to you that we have been keeping a close watch on the financial markets in light of the Presidential election. There may be some short-term volatility on Election Day, particularly if we receive a surprising outcome.
Fortunately, we maintain greater confidence in the long-term. The stock market is much more closely tied to the health, and growth, of the U.S. economy, rather than the election of a Democrat or Republican. The latest economic trends point to sustained growth of U.S. earnings going in to 2017, boosted by an energy price recovery and a more favorable U.S. Dollar exchange rate. Regardless of whether Clinton or Trump wins, the economic fundamentals are on the upswing.
The media have reported that Americans are feeling more stress about this election than previous cycles. We hope to ease your fears and shift your attention to the long-term. Regardless of which candidate is elected next Tuesday, the health of the U.S. economy matters far more to our investment results.
Disclosure: The economic forecasts set forth may not develop as predicted.