November 1, 2020
Today, the financial markets know with certainty that one of two presidential candidates will win in November, and they have known all about the parties’ policies and personalities for quite some time. No matter the outcome, there will be little in the way to surprise corporate America. Although every four years people get upset at the election results personally, it should not result in emotionally driven investment decisions.
Corporate America will continue to adapt and thrive regardless of the outcome. We know publicly traded companies will continue to operate and sell goods and services across the globe no matter who wins on November 3, 2020, or who occupies the White House on January 20, 2021. Although the numbers get creatively twisted and expertly massaged by campaigns from both sides, if you objectively assess the crucial economic variables like job creation, GDP growth, corporate earnings and productivity rates, you will be hard-pressed to tell the difference between previous administrations and the current one. This is because capitalism is deeply engrained across our entire society and, increasingly, across the globe. Corporations everywhere are adept at adjusting to change because they face threats and adversity every day, particularly from competing companies. Most of these challenges are far more consequential than anything happening in Washington D.C.
We have been managing portfolios since 1996 and every four years it’s like the movie Groundhog Day, where we see the exact same strategies magically reappear in the run up to every single presidential election. Our strategy has always been to continually adapt to the environment and adjust portfolios to accommodate the unique needs of our clients. To this point, if you anticipate any cash needs over the next 6 to 12 months, please let us know so that we can prepare appropriately.
Year to date the S&P 500 and Nasdaq are both ahead 1.21%, and 21.61%, respectively, while the Dow is negative 7.14%. The 10-year Treasury is currently yielding 0.88%.
*Disclaimer: This report is a publication of Marchand Faries Financial Management, Inc. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgement of the author as of the date of publication and are subject to change.