Note: Our political discussion is non-partisan and we analyze politics solely for market impact, as markets prefer no candidate, party or ideology. We believe political bias is a blinding behavioral investing error.
Presidential candidates Hillary Clinton and Donald Trump squared off in the first of three debates on September 26. The 90 minute debate came about six weeks before Election Day and viewership was high thanks to the particularly tight race. Moderated by NBC News’ Lester Holt, the much-hyped debate featured topics like “America’s Direction,” “Achieving Prosperity,” and “Securing America.” The candidates touched on popular campaign issues like inequality, taxes, trade and ISIS. However, the debate devolved at times with the candidates trading barbs on Clinton’s emails during her tenure as Secretary of State and Trump’s tax returns.
In the coming weeks, both candidates will likely continue detailing their prescriptions for the country. In turn, media pundits will debate which candidate or party they believe will be best for the economy and stocks. While Republicans fear Clinton will do extraordinary things, Democrats fear the same of Trump.
We encourage investors to watch what politicians actually do, rather than what they say. Candidates often promise big, sweeping changes when campaigning, but the realities of American politics constrain them once they become president, and few of their extraordinary proposals come to fruition. Polarizing campaign rhetoric certainly may increase volatility in the short term (especially as the election approaches,) but Presidential power is more limited than often portrayed, and there are other, more powerful political factors that typically influence market movement over time.
As an investor, it’s important to understand how this year’s election, and the events that follow, could affect your portfolio in the years ahead. We’ve analyzed the market implications of presidential elections over the last century and discovered some important trends you’ll want to know about before November. Whether you are managing your own portfolio, or merely curious about how this year’s election could impact stocks, we invite you to download your free copy of the Investor’s Guide to the 2016 Presidential Election.