NEW YORK (TheStreet) -- The markets' movement on the day following a presidential election has no connection to what will happen in the next year, BloombergTV's Oliver Renick said on Monday morning's "Bloomberg Markets: Americas." Investors need to prepare for volatility after the election but they should not panic.
"At the risk of kind of sounding like your very run of the mill, long term portfolio manager or strategist that are always bullish...you know you always talk to these guys and it's always stay bullish, short term moves, stick around. But it is actually very true," Renick said.
Even though it sounds "ridiculous" to talk about setting one day as a precedent, this is what people will trade on, he continued. That being said, people will also try to project out based on that one day reaction.
"We see it all the time with the month of January," Renick continued. "We talk about the January effect with small caps or stocks doing well. People think 'well if it did poorly in January it'll do poorly the rest of the year.' We talked about the Santa Claus rally in December. There are all these sort of idiosyncratic kind of adages that appear in the market from time to time and it shows that people really do pay attention to short term moves. And they extrapolate on what that could mean and often times that's a very flawed process."
The world is watching as the U.S. prepares to vote on Tuesday and determine if democrat Hillary Clinton or republican nominee Donald Trump will become the nation's 45th president.