Author Topic: Impact of US election on stock market?  (Read 12873 times)

Tyler durden

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Re: Impact of US election on stock market?
« Reply #50 on: June 11, 2020, 12:24:34 PM »
https://www.nytimes.com/2016/11/10/us/trump-election-protests.html
Quote
Thousands of people across the country marched, shut down highways, burned effigies and shouted angry slogans on Wednesday night to protest the election of Donald J. Trump as president.

The demonstrations, fueled by social media, continued into the early hours of Thursday. The crowds swelled as the night went on but remained mostly peaceful.

Well you have to read past the first paragraph .... protesters started small fires / broke windows / injured police officer. “Demonstrations led to property damage”

The other article “ some protestors sprayed graffiti on cars and buildings/ destroyed shop windows.

These are just 2 papers. I don’t want to spoon feed it to you.
Burning an effigy or flag is a protected form of free speech in the US, and a far cry from the claimed 'burning buildings'.

talltexan

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Re: Impact of US election on stock market?
« Reply #51 on: June 12, 2020, 08:54:19 AM »
In a democracy, I'd argue that it's understandable for a little frustration when more people in a country voted for a candidate, and the person with the fewest votes wins.

My understanding of the protests that were held after Trump's election though, is that they were peaceful.  Can you provide some articles that show rioting, burning buildings, and smashing windows by Clinton supporters after Trump winning the electoral college?

The headline couldn’t be better - “Not our president: Protests spread after Donald Trumps Election “

https://www.google.com/amp/s/www.nytimes.com/2016/11/10/us/trump-election-protests.amp.html

Second paragraph in they get to the rioting / fires and broken windows. Also goes on to talk about property damage and personal injury.

https://www.aljazeera.com/news/2016/11/anti-trump-protests-turn-violent-161111090846256.html

Another one for another news paper.

During the period you're describing, stock market did really well.

I'm not interested in debating the Trump-Russia complex of ideas on this thread, I didn't see any indication that they moved markets.

use2betrix

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Re: Impact of US election on stock market?
« Reply #52 on: June 12, 2020, 09:30:01 AM »
There are some theories that Trump is doing everything possible to prop up markets now because a large part of his election platform is based on the success of the stock market.
Didn't Obama have better S&P500 numbers than Trump?  If you're going to equate a political party with stock market performance (which I do not) - um, Democrats it is then I guess.

https://www.macrotrends.net/2482/sp500-performance-by-president

While I have often used this same logic, you do really have to consider that Obama took office at the end of a major recession, while Trump took office after 7-8 years of a strong bull market..

IMO - it’s much more challenging to continue to be successful after a strong bull run, as opposed to the end of a recession.

It’d be similar to the recent March/April market crashes instead taking place next January, and Biden taking office with the Dow at 19k instead of 29k, and giving him credit for bringing the market back up to where it was lol...

While I didn’t mind Obama and thought he did a great job in many aspects, I think it should be more realistic to compare where the market ended with him, vs it’s previous market peak..

That’s just how I look at it. In regards to this upcoming election, it’s easy to hate Trump for lots of things (I haven’t and would never vote for him) but I have a hard time finding too many sound arguments that his policies haven’t been good for the U.S. economy. The results have been at the sacrifice of many social causes and a negative reflection of our country, but for the economy, he has done well.

talltexan

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Re: Impact of US election on stock market?
« Reply #53 on: June 12, 2020, 09:52:38 AM »
The profitability of the largest corporations is just one dimension of a good and just society. Voting should be about considering many dimensions.

Our 'staches may grow more slowly depending on what changes are made to society during the next 2 1/2 years. That by itself does not rule out all of those changes as being necessary or moral.

ctuser1

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Re: Impact of US election on stock market?
« Reply #54 on: June 12, 2020, 10:03:26 AM »
... but I have a hard time finding too many sound arguments that his policies haven’t been good for the U.S. economy. The results have been at the sacrifice of many social causes and a negative reflection of our country, but for the economy, he has done well.

By any objective set of measures, Trump economy is a lot of hype and not much substance. Compare it to other "socialist" periods in the American history and it comes far short.

Yes, you can legitimately question each of those objective measures (e.g. the fact that Obama took office after a recession, giving the market huge room to run), and you can also legitimately find counter-arguments to all those arguments (e.g. the fact that Obama administration held the economy together through a major systemic crisis amid the rise of the Tea Party politics was a massive achievement in itself).

However, the fact that almost any objective measure(s) (at least the ones I am aware of) you pick up seems to point in the same direction does not leave much room for confusion.


grettman

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Re: Impact of US election on stock market?
« Reply #55 on: June 14, 2020, 06:25:53 AM »
One of the strengths of Bogleheads over MMM is that threads like this get shutdown.  Besides, who the hell knows?! 

G-String

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Re: Impact of US election on stock market?
« Reply #56 on: June 15, 2020, 05:43:53 AM »
One of the strengths of Bogleheads over MMM is that threads like this get shutdown.  Besides, who the hell knows?!
No one is forcing you to read this thread. And I'm not sure why it'd get shut down. It's a valid discussion.

nereo

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Re: Impact of US election on stock market?
« Reply #57 on: June 16, 2020, 12:45:26 PM »
One of the strengths of Bogleheads over MMM is that threads like this get shutdown.  Besides, who the hell knows?!

One of the things I find frustrating about the forums over on Bogleheads is how quickly threads get locked. Often if there's even a wiff of political discussion the thread goes *poof*.  however, money and politics cannot be separated so easily.  Taxes, government programs (e.g. the ACA, unemployment, SS) are all political discussions. I prefer open discussions constrained by straight-foward forum rules, rather than the heavy-handed moderators over there.  That said, I post in both locations.

 

Buffaloski Boris

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Re: Impact of US election on stock market?
« Reply #58 on: June 18, 2020, 02:00:24 PM »
One of the strengths of Bogleheads over MMM is that threads like this get shutdown.  Besides, who the hell knows?!

One of the things I find frustrating about the forums over on Bogleheads is how quickly threads get locked. Often if there's even a wiff of political discussion the thread goes *poof*.  however, money and politics cannot be separated so easily.  Taxes, government programs (e.g. the ACA, unemployment, SS) are all political discussions. I prefer open discussions constrained by straight-foward forum rules, rather than the heavy-handed moderators over there.  That said, I post in both locations.

I think allowing political discussion is on the negative side of the ledger.  There is a left-of-center vibe and sometimes smarminess to things here that tends to silence or drive away other voices. And most of the politics ends up in a debate over the virtues/ evils of the current President. It’s as if some posters can’t control themselves when they feel they have the merest  opportunity to shout “Orange Man Bad!” There are thousands if not millions of places on the internet where you can do that all day long and have others validate that viewpoint. I don’t see why it’s needed here.

 I’m merely a guest. And if I don’t like things I’m free to take a hike. On balance I really do like this community and the insights are well worth it. I might just take a break around the election when the political idiocy gets to a fevered pitch. 

MustacheAndaHalf

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Re: Impact of US election on stock market?
« Reply #59 on: June 19, 2020, 02:57:51 AM »
Years ago a thread I made on Bogleheads that crossed the investing/political boundary, and it got locked, and I probably got some kind of warning.  But you only know about censorship when it kicks in, and so years ago I switched over to MMM forums.

So, getting back on topic before someone notices...

The U.S. election is likely to cause volatility... but I don't know when.  The Republican candidate wants to keep tax cuts, the Democratic wants to end them.  That's probably the main thing for the stock market.

But the election also involves changing all the heads of various departments - including the Justice Department.  I think the phrase "Elizabeth Warren nominated to lead Justice Department" could send big tech shares tumbling.  She has proposed applying anti-trust to big tech.  The Democratic candidate has repeated that "Amazon pays $0 in taxes" and how that's unfair... so Senator Warren could play a role.

nereo

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Re: Impact of US election on stock market?
« Reply #60 on: June 19, 2020, 04:18:40 AM »

So, getting back on topic before someone notices...

Thank you...

The U.S. election is likely to cause volatility... but I don't know when.  The Republican candidate wants to keep tax cuts, the Democratic wants to end them.  That's probably the main thing for the stock market.


Tax cuts are one thing that markets will be interested.  Another is trade and tariffs.  The current administration has placed more tariffs than any other administration since WWII.  In response, a bunch of other countries have placed retaliatory tariffs on our exports.  Before Covid these were already having a very big impact.  Now the current administartion is threatening yet more tariffs, most recently in reponse to digital content and labor disputes.

But the election also involves changing all the heads of various departments - including the Justice Department.  I think the phrase "Elizabeth Warren nominated to lead Justice Department" could send big tech shares tumbling.  She has proposed applying anti-trust to big tech.  The Democratic candidate has repeated that "Amazon pays $0 in taxes" and how that's unfair... so Senator Warren could play a role.
The tech sector might not like Warren leading the DOJ, but what markets hate most of all is uncertainty.  And with this administration cabinet level positions have been a revolving door, with many people hired who had no experience with their appointed jobs.  A lot of industry loved having Pruitt/Wheeler at the helm of the EPA because they collectively rolled back all sorts of monitoring and protections.  But this came at the expense of 'cleaner' tech in direct competition, like wind and solar. NJ is proposing a new manufacturing hub for offshore turbines which could assemble and ship several billion$ in these enormous turbines each year.  Trump is a blockade to that, and the plans will likely be scrapped if he gets re-elected.

In sum - there will be winners and losers, but my guess is that stability and predictability will calm the markets more than anything.  In that sense I think a Biden win will tamp down volatility, because it's the exact opposite approach of Trump, who likes to be unpredictable, punitive and scoffs at norms.

talltexan

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Re: Impact of US election on stock market?
« Reply #61 on: June 19, 2020, 06:55:22 AM »
Note: volatility can also mean volatility to the upside.

nereo

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Re: Impact of US election on stock market?
« Reply #62 on: June 19, 2020, 07:26:34 AM »
Volatility is non-directional. You can have high volatility with a bull market, or high volatility with a beat market.
I think the direction of the market won’t change much beard on who is in charge -presidents get far too much credit/blame for broader movement. But he CAN influence volatility to a greater degree, IMO

ctuser1

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Re: Impact of US election on stock market?
« Reply #63 on: June 19, 2020, 07:33:41 AM »
I am tentatively in the camp of elections don't matter for markets.

If you go by strict numbers, the economic growth rate from Truman to Obama is generally better under democratic administrations than republican (4.3% vs. 2.5%). I haven't looked up the actual market data - but that would likely show a similar pattern with lower volatility (since markets anticipate and "discount" the future).

However, I am afraid this election can be norm-breaking in many ways. I'd be surprised if some sort of black swan does NOT show up between now and January. So, all bets are off!!


MustacheAndaHalf

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Re: Impact of US election on stock market?
« Reply #64 on: June 19, 2020, 11:43:02 AM »
Maybe to put the election in rough perspective, here's a partial list of things more impactful to stock market prices than the election:
(1) News of COVID-19 treatments and vaccines.  The hope of going back to normal.
(2) Hints at new lockdowns, like new cases rising.  Fears that the economy will get hurt again.
(3) Actions by the Fed.  Predicting 0% rates for 2021 (because it's bad), or confirming they'll buy bonds.
(4) Congress, usually acting at the last minute with relief packages.
(5) Tariffs and trade wars, impacting import/export profits.
(6) Oil prices and OPEC, partially because fuel usage is one measure of economic activity
...
And somewhere down here, predictions of who wins the next Presidential election.


nereo - I think markets have adapted to President Trump's style, which brings down some volatility and uncertainty.  But volatility spiked in March with COVID-19 cases, and will probably continue owing to the great uncertainty with where we end up months from now.  Companies can't even predict future earnings.

I suspect the market underestimates how much Senator Warren could impact markets.  A majority of the S&P 500's profits for the past 12 months came from the 5 largest companies - they contributed far more than the rest of the market, combined.  When that 20% of the market suffers, people might not realize how big an impact that can have.  I'm not even saying I disagree with the need for competitive markets and anti-trust actions, but I think the markets underestimate the chances.  In fairness, the EU is more likely to act first (and already has started to, I believe).  And those cases take years, so reacting now might be too soon.


I guess the other question is... if this October/November will be very volatile for markets, what do we do about it?  Maybe delay rebalancing or perform more rebalancing during that time frame (for those staying the course).  I'm not familiar with options, but they seem like the most likely manner of capturing volatility.

ChpBstrd

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Re: Impact of US election on stock market?
« Reply #65 on: June 19, 2020, 12:37:45 PM »
I am tentatively in the camp of elections don't matter for markets.

Maybe not in a day-trading perspective, but long-term a lot of things are being decided.

There might be nothing more 20teens than the attitude that leadership doesn't matter, and that a few simple mantras are all that's required to make decisions. Let's hope the year 2020 marks the end of that fad.

ctuser1

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Re: Impact of US election on stock market?
« Reply #66 on: June 22, 2020, 03:41:40 PM »
I am tentatively in the camp of elections don't matter for markets.

Maybe not in a day-trading perspective, but long-term a lot of things are being decided.

There might be nothing more 20teens than the attitude that leadership doesn't matter, and that a few simple mantras are all that's required to make decisions. Let's hope the year 2020 marks the end of that fad.

I believe, long term, the stock market performance will depend on two factors:
1. demographics, increasing or decreasing the population component of the "secular rate of growth".
2. innovation, this is productivity multiplier component of the "secular rate of growth".

There sure are other shorter term factors (e.g. transfer of economic activity from small businesses to the larger, listed ones during the pandemic). But they are likely one time and will only look like blips in the long term return.

So far, elections have not impacted these two factors. However, going forward, they might!!

-------------------------------

Going slightly off topic.

For #1, the quick fix is immigration. That seems to be getting impacted with this administration (they just announced that all work visa's will be suspended). Long term, will at least the current levels be maintained? I'm hopeful, but not sure.

For #2, there are no easy answers. Immigration plays an indirect role. But there are far more complicated sociological factors at play as well. A nice NYTimes article on "Lost Einsteins": https://www.nytimes.com/2017/12/03/opinion/lost-einsteins-innovation-inequality.html

talltexan

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Re: Impact of US election on stock market?
« Reply #67 on: June 23, 2020, 01:21:50 PM »
Really the immigration issue marks the most dramatic reversal of the Republican party in our generation. George W. Bush was trying to use his shredded political capital to reform it in 2007 (he couldn't), but I don't see how today's republicans could ever be treated credibly if they try to do something apart from ending it as Trump has.

ChpBstrd

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Re: Impact of US election on stock market?
« Reply #68 on: June 23, 2020, 03:24:06 PM »
Really the immigration issue marks the most dramatic reversal of the Republican party in our generation. George W. Bush was trying to use his shredded political capital to reform it in 2007 (he couldn't), but I don't see how today's republicans could ever be treated credibly if they try to do something apart from ending it as Trump has.

If Trump loses, the party will be split between the nativists and those who want the votes of a demographic that based on income, educational attainment, and religiosity should be Republican. “W” sided with the integrationists. Trump is with the nativists.

It is the parallel to the moderates vs. socialists divide in the Democratic Party.

The question is whether Trump has branded the Republican Party forever in the eyes of Hispanic voters who would otherwise agree with them. If that is the case, the next Republican presidential candidate will be an integrationist and will likely fail.

Buffaloski Boris

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Re: Impact of US election on stock market?
« Reply #69 on: June 23, 2020, 05:40:58 PM »
Really the immigration issue marks the most dramatic reversal of the Republican party in our generation. George W. Bush was trying to use his shredded political capital to reform it in 2007 (he couldn't), but I don't see how today's republicans could ever be treated credibly if they try to do something apart from ending it as Trump has.

If Trump loses, the party will be split between the nativists and those who want the votes of a demographic that based on income, educational attainment, and religiosity should be Republican. “W” sided with the integrationists. Trump is with the nativists.

It is the parallel to the moderates vs. socialists divide in the Democratic Party.

The question is whether Trump has branded the Republican Party forever in the eyes of Hispanic voters who would otherwise agree with them. If that is the case, the next Republican presidential candidate will be an integrationist and will likely fail.

I think it more likely that the red team is out of power for awhile.  And we'll get to experience a blue team kakistocracy in the mean time.   

We can always hope that one or both of the factions of the duopoly will fall off the map like the Whigs did.  It's unlikely: both factions have spent the last 160 years refining new and better ways to preserve and extend their power. 

Not much difference as investments go.  There might be a drop if the blue team tries to claw back the 2017 corporate tax cuts, but I don't think it likely.     
« Last Edit: June 23, 2020, 05:42:29 PM by Buffaloski Boris »

maisymouser

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Re: Impact of US election on stock market?
« Reply #70 on: September 25, 2020, 02:18:10 PM »
How's everyone feeling now? I've stayed strong through COVID but am shaking in my boots a little as November approaches. RBG's death seems to have gotten everyone EVEN MORE riled up, as if that were even possible at this point.

I will have to have some sort of mantra through the election, which sounds like it might literally take weeks or even more than a month to shake out. Hang on there little green buds... just sit tight until the sun comes back out...!

HPstache

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Re: Impact of US election on stock market?
« Reply #71 on: September 25, 2020, 02:20:12 PM »
How's everyone feeling now? I've stayed strong through COVID but am shaking in my boots a little as November approaches. RBG's death seems to have gotten everyone EVEN MORE riled up, as if that were even possible at this point.

I will have to have some sort of mantra through the election, which sounds like it might literally take weeks or even more than a month to shake out. Hang on there little green buds... just sit tight until the sun comes back out...!

If you're in it for the long run, you've got nothing to "shake in your boots" about...

Retire-Canada

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Re: Impact of US election on stock market?
« Reply #72 on: September 25, 2020, 02:56:03 PM »
How's everyone feeling now?

Just fine. Memories seem to be short around here so I'll remind you what an absolute shock to the system the Trump victory was in 2016. Much FUD was pushed online/TV. The markets did fine. Neither a Biden nor a Trump victory represent a threat to the markets nor does a longer than usual period before the election is decided. Relax. It will be okay. Given your state of mind I'd suggest a low information diet.

Buffaloski Boris

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Re: Impact of US election on stock market?
« Reply #73 on: September 25, 2020, 03:43:21 PM »
How's everyone feeling now? I've stayed strong through COVID but am shaking in my boots a little as November approaches. RBG's death seems to have gotten everyone EVEN MORE riled up, as if that were even possible at this point.

I will have to have some sort of mantra through the election, which sounds like it might literally take weeks or even more than a month to shake out. Hang on there little green buds... just sit tight until the sun comes back out...!

I don’t get the angst over the election that we’re seeing. We’ve known the results for months now: the next president while be a white, male, elderly corporatist. So what’s the big deal?

As for the markets, if we’re really lucky all the Cassandras giving themselves a case of the vapors will result in a sale. I love sales! In 30 years though it won’t matter and we won’t even remember. 

MaaS

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Re: Impact of US election on stock market?
« Reply #74 on: September 26, 2020, 12:38:51 PM »
I'm curious why you think the Fed would create less money in a Biden administration?

maisymouser

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Re: Impact of US election on stock market?
« Reply #75 on: September 26, 2020, 01:02:13 PM »
I guess, if I had to put a finger on why I'm actually concerned, it comes down to a feeling that the US is in decline in general and I don't think "American exceptionalism" is going to dig us out of the holes we've made anytime soon. I don't think we are *that* innovative, we obviously don't care what happens to the majority of our population as a whole, and I could see us continuing the trends of income inequality, etc for multiple decades to come. I've never felt like the long-term situation has ever felt quite so dismal. Like I said, COVID didn't seem like something that would have a noticeable impact to the market or to my long-term-future self, but the way everything else has been going lately gives me great pause. It's hard to feel confident that my US stocks are going to increase in value when the rest of the world is flabbergasted at our decisions and doesn't have confidence in us as of late.

I'm probably being completely illogical about it but damn, it's hard to see a brighter future right now for my friends, my family, and my neighbors. And yeah I guess I am projecting that onto my portfolio.

Buffaloski Boris

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Re: Impact of US election on stock market?
« Reply #76 on: September 27, 2020, 07:34:48 AM »
I guess, if I had to put a finger on why I'm actually concerned, it comes down to a feeling that the US is in decline in general and I don't think "American exceptionalism" is going to dig us out of the holes we've made anytime soon. I don't think we are *that* innovative, we obviously don't care what happens to the majority of our population as a whole, and I could see us continuing the trends of income inequality, etc for multiple decades to come. I've never felt like the long-term situation has ever felt quite so dismal. Like I said, COVID didn't seem like something that would have a noticeable impact to the market or to my long-term-future self, but the way everything else has been going lately gives me great pause. It's hard to feel confident that my US stocks are going to increase in value when the rest of the world is flabbergasted at our decisions and doesn't have confidence in us as of late.

I'm probably being completely illogical about it but damn, it's hard to see a brighter future right now for my friends, my family, and my neighbors. And yeah I guess I am projecting that onto my portfolio.

I came to the conclusion that the US market was overpriced relative to its upside potential. And I used to rail on about it. Then I came to the obvious (but not brilliant) conclusion that there was no need to invest in the US at all if I didn’t want to. The transaction costs for international equities are low, and what does it matter to me whether investment returns come from the US or elsewhere? Fast forward to today, and I have very low exposure to US equities. I kind of hope that US equities do take a fall so I can diversify into them, but it’s not a huge deal to me either way.

A lot of folks here spend their energy and stomach lining worrying and strategizing over things they can’t affect the outcome of. Like the election results, or nation level demographic trajectories. I think it better to focus on the things I can affect, like portfolio diversification or improving the lives of those of those near and dear to me.

Paper Chaser

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Re: Impact of US election on stock market?
« Reply #77 on: September 27, 2020, 12:06:09 PM »
I guess, if I had to put a finger on why I'm actually concerned, it comes down to a feeling that the US is in decline in general and I don't think "American exceptionalism" is going to dig us out of the holes we've made anytime soon. I don't think we are *that* innovative, we obviously don't care what happens to the majority of our population as a whole, and I could see us continuing the trends of income inequality, etc for multiple decades to come. I've never felt like the long-term situation has ever felt quite so dismal. Like I said, COVID didn't seem like something that would have a noticeable impact to the market or to my long-term-future self, but the way everything else has been going lately gives me great pause. It's hard to feel confident that my US stocks are going to increase in value when the rest of the world is flabbergasted at our decisions and doesn't have confidence in us as of late.

I'm probably being completely illogical about it but damn, it's hard to see a brighter future right now for my friends, my family, and my neighbors. And yeah I guess I am projecting that onto my portfolio.

I'm of the opinion that the "American Middle Class" is a bit of a historical anomaly that was created from the ashes of a very unique set of circumstances. Water always finds it's level, and as those historically unique circumstances regress to the mean the Middle Class is eroded. Therefore, I believe that income in-equality is going to get worse because that's the way it pretty much always has been outside of the post WWII rebuilding process in a handful of Allied countries.

It's for that reason, that I'm investing more than ever. If I want my heirs to have a decent shot at what we consider a "middle class" life, I've got to grow my wealth as much as possible before costs of housing/healthcare/etc climb any higher. Me fearing what might happen to the markets is something that my future grandkids can't afford. If the COVID, "K shaped" recovery has taught us anything, it's that the markets are only concerned with those wealthy enough to participate in the markets.
« Last Edit: September 27, 2020, 12:10:01 PM by Paper Chaser »

WhiteTrashCash

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Re: Impact of US election on stock market?
« Reply #78 on: September 27, 2020, 01:05:30 PM »
If Biden wins, in the short term there will be a buying opportunity because the Wall Street bros will panic. Then, it will turn into another long-term earning opportunity like the entire Obama administration and there will be less market volatility than there has been during the Trump regime.

Buffaloski Boris

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Re: Impact of US election on stock market?
« Reply #79 on: September 27, 2020, 01:35:11 PM »


I'm of the opinion that the "American Middle Class" is a bit of a historical anomaly that was created from the ashes of a very unique set of circumstances. Water always finds it's level, and as those historically unique circumstances regress to the mean the Middle Class is eroded. Therefore, I believe that income in-equality is going to get worse because that's the way it pretty much always has been outside of the post WWII rebuilding process in a handful of Allied countries.

It's for that reason, that I'm investing more than ever. If I want my heirs to have a decent shot at what we consider a "middle class" life, I've got to grow my wealth as much as possible before costs of housing/healthcare/etc climb any higher. Me fearing what might happen to the markets is something that my future grandkids can't afford. If the COVID, "K shaped" recovery has taught us anything, it's that the markets are only concerned with those wealthy enough to participate in the markets.

Well said.

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Re: Impact of US election on stock market?
« Reply #80 on: September 27, 2020, 02:08:11 PM »
If Biden wins, in the short term there will be a buying opportunity because the Wall Street bros will panic.

Will they? CNN: Wall Street is shunning Trump. Campaign donations to Biden are five times larger

EDITed to add - Wall Street likes stability. Poor pandemic response, trade wars, failing to secure economic stimulus, and threats of not stepping down are bad for business.
« Last Edit: September 27, 2020, 02:19:11 PM by PDXTabs »

LurkingMustache

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Re: Impact of US election on stock market?
« Reply #81 on: September 29, 2020, 05:33:03 PM »
A wise comment (not mine) that has stuck with me on this type of question:

"What's interesting is that before an election, 100% of the public is uncertain or upset. After an election roughly 50% will be upset or uncertain. Better to buy before the election, in my opinion. "

ChpBstrd

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Re: Impact of US election on stock market?
« Reply #82 on: September 29, 2020, 08:37:56 PM »
This is a long read, but very worth it to understand the seemingly nonsensical market reactions to recent news.

https://osam.com/Commentary/upside-down-markets

TL;DR: government stimulus/budget deficits necessarily puts money into the hands of investors and props up asset prices, at the expense of yield. However, it is also likely to increase volatility because with yields so low no one can afford to "lose" a couple decades of bond coupons in one correction.

My take: Stocks have probably already priced in some probability of a 2nd stimulus bill. Thus, stocks will go up if the probability of a 2nd big stimulus bill goes up, and down if the probability goes down. If either party controls both Congress and the White House, we will see stocks go up. On the other hand, gridlock will be bad this time. For example, if Biden wins but Republicans hold the Senate, I would not expect them to help "his" economy. QE will still occur, but the era of big wealth transfers would be over.

bigblock440

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Re: Impact of US election on stock market?
« Reply #83 on: September 30, 2020, 12:17:56 PM »
I guess, if I had to put a finger on why I'm actually concerned, it comes down to a feeling that the US is in decline in general and I don't think "American exceptionalism" is going to dig us out of the holes we've made anytime soon. I don't think we are *that* innovative, we obviously don't care what happens to the majority of our population as a whole, and I could see us continuing the trends of income inequality, etc for multiple decades to come. I've never felt like the long-term situation has ever felt quite so dismal. Like I said, COVID didn't seem like something that would have a noticeable impact to the market or to my long-term-future self, but the way everything else has been going lately gives me great pause. It's hard to feel confident that my US stocks are going to increase in value when the rest of the world is flabbergasted at our decisions and doesn't have confidence in us as of late.

I'm probably being completely illogical about it but damn, it's hard to see a brighter future right now for my friends, my family, and my neighbors. And yeah I guess I am projecting that onto my portfolio.

The rest of the world has always been flabbergasted at our decisions, why should it be different now?

bigblock440

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Re: Impact of US election on stock market?
« Reply #84 on: September 30, 2020, 12:18:49 PM »
snip
If the COVID, "K shaped" recovery has taught us anything, it's that the markets are only concerned with those wealthy enough to participate in the markets.

What is a "K shaped" recovery?

sherr

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Re: Impact of US election on stock market?
« Reply #85 on: September 30, 2020, 12:26:31 PM »
snip
If the COVID, "K shaped" recovery has taught us anything, it's that the markets are only concerned with those wealthy enough to participate in the markets.

What is a "K shaped" recovery?

Google says it's a recovery where the rich get richer and the poor get poorer.

WhiteTrashCash

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Re: Impact of US election on stock market?
« Reply #86 on: September 30, 2020, 02:56:12 PM »
snip
If the COVID, "K shaped" recovery has taught us anything, it's that the markets are only concerned with those wealthy enough to participate in the markets.

What is a "K shaped" recovery?

Google says it's a recovery where the rich get richer and the poor get poorer.

I think more people should have been saving and investing during the 12 years of steady economic growth between the Great Recession and the COVID-19 Crisis, but I guess Madison Ave. ad execs are really good at selling F-150 trucks and Disney vacations. If more people had saved and invested, they'd be in a better position to handle this crisis.

Paper Chaser

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Re: Impact of US election on stock market?
« Reply #87 on: October 01, 2020, 04:03:38 AM »
snip
If the COVID, "K shaped" recovery has taught us anything, it's that the markets are only concerned with those wealthy enough to participate in the markets.

What is a "K shaped" recovery?

Google says it's a recovery where the rich get richer and the poor get poorer.

I think more people should have been saving and investing during the 12 years of steady economic growth between the Great Recession and the COVID-19 Crisis, but I guess Madison Ave. ad execs are really good at selling F-150 trucks and Disney vacations. If more people had saved and invested, they'd be in a better position to handle this crisis.

For most Mustachian types, with white collar back grounds and the ability to work from home, the Covid shut downs and economic fallout are little more than an annoyance that's pretty much over with (S&P500 is up over 3% YTD). For tons of other people, it's an ongoing concern. I don't want to excuse financial irresponsibility but a whole lot of the people that are suffering now simply don't make enough to really save/invest outside of perhaps a 401k if they're lucky. Or they're small business owners that were heavily invested in their business rather than financial markets. Think of the jobs/industries that are still shut down or greatly reduced and it's service jobs like retail, bars/restaurants, concert/party/wedding venues, hotels, etc. The people that work in these places typically make low wages, probably aren't offered any kind of employer sponsored retirement plan, and are lucky if they have health insurance through their employer.

Service jobs have actually suffered more in higher income areas, because the customer flow into many of these businesses stopped completely in recent months as nearly all of the customers were able to work from home:

https://www.bloomberg.com/news/features/2020-09-24/harvard-economist-raj-chetty-creates-god-s-eye-view-of-pandemic-damage

We won't hear sob stories about over-leveraged "middle class" people losing their stuff for a few more months as they probably had a bit more cushion, and higher likelihood of remaining employed through the shutdowns.
« Last Edit: October 01, 2020, 04:08:10 AM by Paper Chaser »

talltexan

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Re: Impact of US election on stock market?
« Reply #88 on: October 01, 2020, 11:16:18 AM »
snip
If the COVID, "K shaped" recovery has taught us anything, it's that the markets are only concerned with those wealthy enough to participate in the markets.

What is a "K shaped" recovery?

Google says it's a recovery where the rich get richer and the poor get poorer.

I think more people should have been saving and investing during the 12 years of steady economic growth between the Great Recession and the COVID-19 Crisis, but I guess Madison Ave. ad execs are really good at selling F-150 trucks and Disney vacations. If more people had saved and invested, they'd be in a better position to handle this crisis.

Indeed we may look back on the remarkable bull market from 2009-2020 as a gold age for wealth creation.

It's particularly brutal for people who--by chance--could not position themselves well to take advantage of it. I graduated in 2008 and got a job quickly. People who graduated during the next two years faced a much stiffer job market, which would have cost them the chance to quickly build their nuts during those early years.

Many people benefitted when the ACA came fully online in 2015. If their health emergency came after that--not before--their ability to generate wealth was juiced yet again.

And these advantages accumulate.

3toesloth

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Re: Impact of US election on stock market?
« Reply #89 on: October 13, 2020, 04:54:04 PM »
I guess, if I had to put a finger on why I'm actually concerned, it comes down to a feeling that the US is in decline in general and I don't think "American exceptionalism" is going to dig us out of the holes we've made anytime soon. I don't think we are *that* innovative, we obviously don't care what happens to the majority of our population as a whole, and I could see us continuing the trends of income inequality, etc for multiple decades to come. I've never felt like the long-term situation has ever felt quite so dismal. Like I said, COVID didn't seem like something that would have a noticeable impact to the market or to my long-term-future self, but the way everything else has been going lately gives me great pause. It's hard to feel confident that my US stocks are going to increase in value when the rest of the world is flabbergasted at our decisions and doesn't have confidence in us as of late.

I'm probably being completely illogical about it but damn, it's hard to see a brighter future right now for my friends, my family, and my neighbors. And yeah I guess I am projecting that onto my portfolio.

I'm right with maisymouser. Without a correction even larger than March Covid I don't plan on buying any stocks anytime soon. I'm thinking that the election could give us that much needed correction. I'm new to the forum (think I had an account in the past) but my thought is that since consumption is ~70% of the economy and that is being propped up with stimulus checks, 0% interest, and QE what happens when one or more of those stop or their effect starts to drop. It seems like the majority of opinions split based on time horizons. Since I'm close to FI and don't want to extend working much longer I'm very conservative. 50% bond 20% cash, 30% company stock account. If I was just starting out I would go mostly VTSAX, or if I had more than enough saved I would be the traditional 50/50, but since markets look way overpriced I've backed way off equities. Would love more opinions?

ChpBstrd

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Re: Impact of US election on stock market?
« Reply #90 on: October 14, 2020, 08:30:28 AM »
I guess, if I had to put a finger on why I'm actually concerned, it comes down to a feeling that the US is in decline in general and I don't think "American exceptionalism" is going to dig us out of the holes we've made anytime soon. I don't think we are *that* innovative, we obviously don't care what happens to the majority of our population as a whole, and I could see us continuing the trends of income inequality, etc for multiple decades to come. I've never felt like the long-term situation has ever felt quite so dismal. Like I said, COVID didn't seem like something that would have a noticeable impact to the market or to my long-term-future self, but the way everything else has been going lately gives me great pause. It's hard to feel confident that my US stocks are going to increase in value when the rest of the world is flabbergasted at our decisions and doesn't have confidence in us as of late.

I'm probably being completely illogical about it but damn, it's hard to see a brighter future right now for my friends, my family, and my neighbors. And yeah I guess I am projecting that onto my portfolio.

I'm right with maisymouser. Without a correction even larger than March Covid I don't plan on buying any stocks anytime soon. I'm thinking that the election could give us that much needed correction. I'm new to the forum (think I had an account in the past) but my thought is that since consumption is ~70% of the economy and that is being propped up with stimulus checks, 0% interest, and QE what happens when one or more of those stop or their effect starts to drop. It seems like the majority of opinions split based on time horizons. Since I'm close to FI and don't want to extend working much longer I'm very conservative. 50% bond 20% cash, 30% company stock account. If I was just starting out I would go mostly VTSAX, or if I had more than enough saved I would be the traditional 50/50, but since markets look way overpriced I've backed way off equities. Would love more opinions?

Indeed, the speed of the US’s decline is rivaling the USSR during the 1980’s. Relatively few people, especially young people, have confidence in their form of government. Imagine going from superpower to a broken up and impoverished oligarchy within about 5 years as the Russians did. Don’t say it is impossible. The 2020 election is going to be contested and there will be acts of violence and terrorism. Whether an intact democracy with freedoms and a high standard of living emerges from the chaos is anyone’s guess, but I’m thinking consumerism will continue, even as our governance comes to resemble Russia’s. It’s the only remaining widely-shared ideology amongst Americans.

If there is a correction around election uncertainty and riots, I might drop a few tens of thousands on long call options. The market will go back up because we are all convinced that consumer spending is the path to happiness, even if we can no longer cooperate on basic things like masks to save our own lives. Facebook is in control.

SwordGuy

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Re: Impact of US election on stock market?
« Reply #91 on: October 14, 2020, 09:12:11 AM »
Most of the people fighting against the current administration don't want a soviet style government, they want the American style government we were all taught in k-12 schooling that we had.

They want the big money out of elections.

They want more regulation of corporate activities so people go to jail when they poison us for profit.

They want people who work for a living to actually receive a decent living.

There are some that have lost faith in the capitalistic system because they don't have any hope those reforms will happen.    If we make it happen anti-capitalism will largely disappear.

bwall

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Re: Impact of US election on stock market?
« Reply #92 on: October 14, 2020, 09:21:44 AM »
Most of the people fighting against the current administration don't want a soviet style government, they want the American style government we were all taught in k-12 schooling that we had.

They want the big money out of elections.

They want more regulation of corporate activities so people go to jail when they poison us for profit.

They want people who work for a living to actually receive a decent living.

There are some that have lost faith in the capitalistic system because they don't have any hope those reforms will happen.    If we make it happen anti-capitalism will largely disappear.

+1

We're a very very long way from Soviet style collapse; either in speed or magnitude.

The USA still innovates better than any other country. The Nobel Prize in Chemistry this year went to an American researcher who's discovery in 2012 will change the world as we know it.

If the discovery seems recent for a Nobel Prize award, you would be correct. Which is a signal as to how groundbreaking it was. Americans, and those who participate in the US stock market, will all benefit from that discovery. Which ties into (my interpretation of) SwordGuy's next to last point; we need more Americans to earn more per hour so that they can participate in the stock market.


maisymouser

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Re: Impact of US election on stock market?
« Reply #93 on: October 14, 2020, 09:33:29 AM »
I guess, if I had to put a finger on why I'm actually concerned, it comes down to a feeling that the US is in decline in general and I don't think "American exceptionalism" is going to dig us out of the holes we've made anytime soon. I don't think we are *that* innovative, we obviously don't care what happens to the majority of our population as a whole, and I could see us continuing the trends of income inequality, etc for multiple decades to come. I've never felt like the long-term situation has ever felt quite so dismal. Like I said, COVID didn't seem like something that would have a noticeable impact to the market or to my long-term-future self, but the way everything else has been going lately gives me great pause. It's hard to feel confident that my US stocks are going to increase in value when the rest of the world is flabbergasted at our decisions and doesn't have confidence in us as of late.

I'm probably being completely illogical about it but damn, it's hard to see a brighter future right now for my friends, my family, and my neighbors. And yeah I guess I am projecting that onto my portfolio.

I'm right with maisymouser. Without a correction even larger than March Covid I don't plan on buying any stocks anytime soon. I'm thinking that the election could give us that much needed correction. I'm new to the forum (think I had an account in the past) but my thought is that since consumption is ~70% of the economy and that is being propped up with stimulus checks, 0% interest, and QE what happens when one or more of those stop or their effect starts to drop. It seems like the majority of opinions split based on time horizons. Since I'm close to FI and don't want to extend working much longer I'm very conservative. 50% bond 20% cash, 30% company stock account. If I was just starting out I would go mostly VTSAX, or if I had more than enough saved I would be the traditional 50/50, but since markets look way overpriced I've backed way off equities. Would love more opinions?

To be clear, I have not and do not plan to stop buying index funds with surplus cash. I'm still trusting my albeit aggressive and maybe too-bold strategy of 100% stocks, but it hasn't been easy as November approaches. I can sit with the idea of a recession, but not knowing what's on the other side is what makes me stressed. So it goes.

bacchi

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Re: Impact of US election on stock market?
« Reply #94 on: October 14, 2020, 09:51:18 AM »
We know that, in the 2000 contested election, the S&P went down ~8% and the Nasdaq went down ~25% during November.

Of course, that was also the year of the dotcom bomb and QQQ was already tumbling because of the "quantity over profit" balance sheet belief (Uber anyone?).

So, expect a sky-is-falling decline while the election is contested and then the market will return to where it was before, which is the lukewarm covid miasma.

MustacheAndaHalf

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Re: Impact of US election on stock market?
« Reply #95 on: October 14, 2020, 10:01:55 AM »
USSR had a huge problem with productivity - things took forever.  I recall a joke that a guy (in the USSR) buys a dishwasher:
Customer: "When will it be delivered?"
Salesman: "In ten years"
Customer: "Morning or afternoon?"
Salesman: "It's in 10 years, why does it matter?"
Customer: "Because I'm having a refrigerator delivered that afternoon."

I don't really see the comparisons to 1980s USSR.  Didn't the USSR pour all of it's resources into preventing one soviet country from going bankrupt?  And instead the whole USSR went bankrupt?

The U.S. is far richer than the 1980s USSR by any measure - global market cap, size of economy, productivity, etc.  And when a car rental business is failing in the U.S., like Hertz, it's allowed to go bankrupt and collapse in an orderly manner.  That too, differs from the USSR approach.

3toesloth

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Re: Impact of US election on stock market?
« Reply #96 on: October 14, 2020, 10:50:42 AM »
We know that, in the 2000 contested election, the S&P went down ~8% and the Nasdaq went down ~25% during November.

Of course, that was also the year of the dotcom bomb and QQQ was already tumbling because of the "quantity over profit" balance sheet belief (Uber anyone?).

So, expect a sky-is-falling decline while the election is contested and then the market will return to where it was before, which is the lukewarm covid miasma.
I'm mostly concerned with the quick recoveries. The market tanking makes total sense to me as valuations are sky high, interest rates 0, earnings level or dropping for the last few years, gold and real estate very high. The quick recovery just sets markets up to crash again possibly worse than last time. Basically no investments that seem reasonable to buy right now, actually looking into getting a cheap house or land so that at least my COL could drop to near nothing if neaded.

ChpBstrd

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Re: Impact of US election on stock market?
« Reply #97 on: October 14, 2020, 08:04:31 PM »
USSR had a huge problem with productivity - things took forever.  I recall a joke that a guy (in the USSR) buys a dishwasher:
Customer: "When will it be delivered?"
Salesman: "In ten years"
Customer: "Morning or afternoon?"
Salesman: "It's in 10 years, why does it matter?"
Customer: "Because I'm having a refrigerator delivered that afternoon."

I don't really see the comparisons to 1980s USSR.  Didn't the USSR pour all of it's resources into preventing one soviet country from going bankrupt?  And instead the whole USSR went bankrupt?

The U.S. is far richer than the 1980s USSR by any measure - global market cap, size of economy, productivity, etc.  And when a car rental business is failing in the U.S., like Hertz, it's allowed to go bankrupt and collapse in an orderly manner.  That too, differs from the USSR approach.

The US just lost Trillions losing a 20 year war in Afghanistan, just like the Soviets.
The US just lost more trillions in Iraq.
The US just this year bailed out its airlines, banks, and other industries. Are they partially state-owned-enterprises now? Do we expect them to increase productivity?
Would a process of decline be impossible beyond a certain scale?


talltexan

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Re: Impact of US election on stock market?
« Reply #98 on: October 15, 2020, 06:22:18 AM »
The entity that is closest to a Sovereign bank made loans that are convertible to grants to many of these companies. GM-style Public ownership of these companies is not on the table.

GuitarStv

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Re: Impact of US election on stock market?
« Reply #99 on: October 15, 2020, 07:10:17 AM »
The entity that is closest to a Sovereign bank made loans that are convertible to grants to many of these companies. GM-style Public ownership of these companies is not on the table.

So all the negatives of communism (losing shit-tons of money) without the benefits (actually getting to say how the company is run)?  Capitalism at it's finest.

:P