MARKETS & POLITICAL PARTIES
Issue #43
Donald Trump’s Covid-19 diagnosis, announced with just over a month to go until election day, has upended a presidential race that was already like no other. The President was swift to assert that he is in charge and initial reports were that his case was mild. In fact, Monday he returned to the White House.
The experience of UK prime minister Boris Johnson, who became seriously ill with the virus in the spring, has demonstrated just how important it is to have a clear process of temporary and even permanent succession.
Both President Trump and his rival Joe Biden are in their seventies, Trump’s recent diagnosis should serve to put a spotlight on the importance of the Vice President in the upcoming election. When they meet for the debate in Salt Lake City on Wednesday both Pence and Harris will not only need to prove their vice-presidential qualities but that they are ready to lead the Nation.
MARKETS:
What will the markets do if X is elected President?
The answer is that it really doesn’t matter which party’s candidate is elected. There is no statistical significance that correlates market performance to a politcal party holding the office of President of the United States. None.
Check out the two charts below from Dimensional Fund Advisors (DFA).
From DFA, “stocks have rewarded disciplined investors for decades, through Democratic and Republican presidencies. It’s an important lesson on the benefits of a long-term investment approach….. shareholders are investing in companies, not a political party. And companies focus on serving their customers and growing their businesses, regardless of who is in the White House”.
PODCAST:
Take 15 Podcast: In this podcast from the CFA Institute Mark W. Yusko, founder, CEO, and CIO of Morgan Creek Capital Management, shares his views on a range of topics, including the US economic recovery, asset allocation, manager selection, and really good versus great investors.
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Be well and stay safe. - Sean Bill / MacroCrunch