As markets move ever closer to the hotly contested and wildly debated 2020 presidential election, the question on every investor’s mind is “What’s next?”. While we lack a crystal ball, we do have history and a finance specialist or three to help.
Mike Hanson, senior vice president of research at Fisher Investments, Real Money contributor Bob Lang and Larry Siegel director of research at the CFA Institute Research Foundation, joined TheStreet contributor Laura Petrecca to break down what elections mean for Wall Street, and just as importantly, how the average investor can prepare for whatever comes next.
Hanson suggested that investors look beyond who is or who could be president and look at how a presidential cycle historically impacts stocks. Despite the unprecedented events of 2020, Hanson said this year is more business as usual than some investors may realize. “Presidential fourth years tend to be positive. They also tend, though, to be flattish leading up to the election and then their backend loaded. You tend to see kind of a relief rally once the election has happened. And in fact, even though the path to get there has been completely bizarre this year, [we believe] we're right where we ought to be for a presidential fourth year,” Hanson said.
Agreeing with Hanson, Lang added, “I think that once the election results are out and that uncertainty is removed that we should see a little bit of a market rally after.”
But how have markets reacted when Republican and Democratic administrations are compared?
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