Election reaction - quick takes on the market

November 05, 2020 | Simbul-Lezon Wealth Management Group


With votes still to be counted in key swing states with razor-thin margins, it looks like things are just beginning to get sorted out. But the equity market has been taking things in stride so far, and we explain why investors should do the same.

At this time, the final results of the U.S. election are up in the air as millions of ballots are being counted in several key battleground states. At present, neither President Trump nor Democratic nominee Biden has managed to secure the necessary 270 Electoral College votes to win the presidency. Much remains uncertain about the presidential election, as well as the crucial outcomes of the U.S Congress and the Senate.

Read the special report here.

Key messages

  • An uncertain result was to some extent anticipated and, as such, news continues to be fluid and much remains to be determined
  • We urge all clients to resist the impulse to make major portfolio adjustments solely on U.S. political developments. Uncertainty should not drive your investment decision-making. Instead, please keep your attention squarely focused on economic fundamentals and longer-term investment goals
  • It's important to keep in mind that after the dust settles, staying on course goes a long way towards helping you and your family reach long-term goals
  • Our firm is keeping a very close eye on current events and are committed to keeping you up-to-date. Please do not hesitate to contact us with specific questions about your portfolio. 

Commentary and resources

  • The closeness of the race substantially increases the likelihood that results will be delayed for an extended period of time. As stated in RBC GAM’s Chief Economist, Eric Lascelles’ recently released article "Investor Insights: 2020 U.S. election proves a tight race", it’s worth remembering that the 2000 U.S. election was not resolved until mid-December
  • "Staying the course" is an article we've shared before which is just as relevant today and outlines key points and strategies to stick to your plan and maintain confidence through all types of markets
  • "Political interference" is a recent article from the recently published Portfolio Advisor - Fall 2020 newsletter. Historically, presidential election outcomes have delivered surprising results when it comes to equity market performance, defying the "common wisdom" that they perform better under Republicans due to policies such as lower taxes and less regulation

Your investment team

Marita Simbul-Lezon
Mary Rose Simbul
George Tsolakidis
Scott Donovan