Patience is RequiredSubmitted by Bond & Devick Wealth Partners on November 4th, 2020
Patience is Required
The 59th Presidential election is just as interesting as the 58th. It now appears that the vocation of pollster can be grouped with other notable endeavors like weather forecasters. For whatever reason, both national and state polls were not accurate in the last two Presidential races. The race for President is still too close to call, but a few generalizations can be made.
- This will be the largest voter turnout ever for a Presidential election.
- We most likely will not know the results for Pennsylvania until Friday.
- Regardless of how it turns out, lawyers and the courts will be involved.
Most pundits believed that the stock market would react well to a Biden victory if it were accompanied by a “blue wave”, which meant the Senate would be ruled by Democrats as well. This would provide for larger stimulus packages and larger infrastructure spending. Most people thought that the worst possible outcome would be a Biden victory with a Republican Senate, because divided government would not allow as much spending to offset the economic harm of the pandemic. It is still very early, and we do not know who has won the Presidency and several Senate races are too close to call, but it appears we will have divided government one way or the other.
Generally, the stock market has done well during periods of divided government. Cynics would say this is because not much can get done in this situation. Others might argue to get anything done requires compromise which is the preferred method of government.
The biggest contributor to stock market volatility is typically uncertainty. The stock market loathes uncertainty. We anticipate market volatility to pick up over the short-term until one of the Presidential candidates has been declared the winner. This is where the patience part comes in. Democracy is not always a pretty process and Americans are not used to waiting to find out who won an election. But the election process is the most important part of our democracy and every vote must be counted.
Our advice is simple. First of all, limit social media exposure. Second, go for a walk in a park or enjoy nature. The weather in the Twin Cities is glorious this week – don’t waste this beautiful weather tied to your phone, computer, or television waiting to see who is getting the most votes in Michigan’s 4th district. Third, be patient and let the process work.
Diversified and balanced portfolios are made for times like these. Try to stay focused on your long-term goals and always feel welcome to call us with any questions or concerns.
Take care and be well,
The Bond&Devick Team