Elections and the markets

Will the changing of the guard impact your investments?

by Mike Joslin

The press is having a field day with the Hillary vs. Trump election shenanigans. The near-daily release of yet more tawdry details of both candidates just boggles the mind, especially when considering that one of them will actually be elected to lead our great nation in a few weeks. What does this portend for us? What does the rest of the world make of our election process and the candidates? How will our country be viewed in the future by other countries, from Canada to North Korea? Lots of questions, few answers at this point.

Fortunately, while financial markets can be repressed and may stagnate for periods of time, economic activity continues, regardless of politics. We can’t deny the possibility that securities prices might vacillate more in the next month or two than they have all year. But, maybe they won’t. And maybe they only vacillate upward, since on November 9, much of the politically caused tension should dissipate. Markets prefer certainty, and like it or not, they will get some measure of it soon.

As one conference speaker put it earlier this year, the heads of most companies probably don’t spend a ton of time thinking about politics. Most of their time is devoted to running their businesses better and more efficiently. Granted, the political climate can’t be ignored, and in many industries, doing so could jeopardize your company’s chances of remaining a going concern.

Regardless of our system’s imperfections, however, from an investment standpoint at least, the U.S. is still viewed as the safest government on the planet — and that is not likely to change any time soon. If you doubt this, just wait for the next geopolitical turmoil in any part of the globe; you will likely see an increase in prices of U.S. Treasuries bonds the following morning. Investors, be they corporations, individuals, pension funds, or sovereign countries, vote with their feet and their pocketbooks, and in tough times, they still seek shelter under the umbrella of the U.S. financial system.

As for us, we’ll also focus on what we can control, while being mindful of what we can’t. That umbrella might come in handy in early November. But if stormy weather hits, like all storms, it too will pass.

Advisory services are offered by Joslin Capital Advisors, LLC, an SEC Registered Investment Advisor.

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