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.