Playing the Elections
The nexus between politics, policy, and the economy hides in plain sight during poll season. Many savvy investors play the elections by devising strategies that are dependent on the outcome of poll season. Three simple ideas could help play the elections better.
First, one must understand the relationship between markets and elections. The outcome of poll season fixes the political backdrop. Often, the wheels of the economic machine are already set in motion. So, the outcome of elections may be more noise than signal.
Second, one must prepare for poll season. In the short-run, taking advantage of volatility in the stock market is paramount. In the long-run, elections fade and consistency matters. Giving up on investments in the post-election period is harmful to wealth creation. Avoiding investments during poll season has an opportunity cost.
Last, one must treat the exercise of investing as a process. Every investment needs to be planted at the right time, nurtured, and then reaped at maturity. Reviewing and restructuring investments before and during elections is crucial. The post-election period should focus on implementing strategies.
Opportunities will flood in during poll season, there’s no reason to be left behind.