If coming into the US election you were hoping for a clear result, a smooth election process, proper leadership and a genuine hope to move forward with purpose then unfortunately you will be sadly disappointed.
What we are witnessing is anything but.
With the election too close to call, it would appear that the courts will now be called upon to declare a result with accusations of fraud and the like now taking centre stage.
How desperately sad it is for a country which the world looked to as a beacon of hope and freedom. What is clear is that the United States is hopelessly divided. Decency, civility and the collective cause have been replaced with partisanship. The common cause no longer matters and it instead has been replaced by a pursuit of one’s self, one’s own outcome at the expense of all others.
So what does all this mean for investors?
Regardless of the result one thing we do know is that markets do not like uncertainty.
The environment investors find themselves in is one of uncertainty around the election, the lack of direction and the time this may take to play out. Regardless of who is ultimately declared the winner it looks as though being so close will ensure that policy decision making and implementation will remain difficult due to ongoing political games and self-interest.
We have been doing our weekly Pulse Check webinars and have often had the topic of the US election as the headline act. One message that we have consistently maintained is that we do believe that barring the initial period of election result clarity and repositioning of the deck chairs in Congress that the markets will not be favoured more so by either the Republicans or the Democrats. History has been clear on this relationship.
We need to focus on the knowns, and the knowns are that the sooner the uncertainty can be removed the sooner economic growth can develop and in turn the markets do what we expect over the longer term.
We encourage you to try and block out some of the noise you will see coming through from markets. Last night in the US the markets were trading in a large range with 2.8% being the difference between the days highs and lows with the end result being a positive 1.34% day on the Dow as investors speculated on who will win the election and what the sectors of the economy look to benefit or suffer depending on the result.
We will always maintain that this is a dangerous game to play and prefer to ensure that we maintain our discipline on firstly ensuring that the short to medium term investor requirements are solidly positioned allowing us to be aware of the noise but not be distracted by the noise over longer time frames. Let’s not forget that as soon as the markets deal with the election we will again be speaking about the global health pandemic that has taken a back seat over the last couple of days. The noise is here to stay, our job is to try and lead a path through the noise, which we know there will be plenty of.
As always, we will keep you up to date and should you have any questions please do not hesitate to contact our offices.