Kevin Mahn, CIO at Hennion & Walsh, joins Market Domination to offer insight into why the market has yet to truly price into election season.
“I think the market is now focused on when the first rate cuts will come through and whether or not this economic slowdown will actually fall into recession territory. If the market is indeed pricing in what has happened historically, remember that political parties affect certain areas of the market but not generally the market as a whole. In fact, history tells us that divided governments are generally the best bode well for stock market performance because no big new rules, laws or regulations get passed,” Mahn says.
For more expert insights and the latest market trends, click here to watch this entire episode of Market Domination.
This post Nicholas Jacobino
Video Transcript
I want to talk about this, um, because of the election issue, and I think you all know that we’re going to be talking about this for the next few months or longer.
Well, obviously there’s a lot of discussion right now about whether President Biden should step down as the Democratic nominee.
There was no real reaction from the market to this argument.
Why do you think this is?
And when do you think we’ll start to feel that more?
I think the market is now focused on when the first rate cuts will occur.
And if in fact this economic slowdown does turn into a recession, and in all areas the markets are really pricing that in, and that’s what has happened historically, remember that political parties affect certain sectors of the market but generally not the market as a whole.
In fact, history has shown that divided governments generally bode well for stock market performance.
That’s because no major new rules, laws or regulations will be enacted.
I think the markets believe the same thing will happen with this election.
What we tell our clients is to build your portfolio to align with the opportunities that you think exist in the current economy.
And once the election results are known, you can overweight or underweight certain sectors based on the policies of the people in power at the time.
But don’t let it influence every decision you make.
We know that trying to time the market is a futile endeavor, so we shouldn’t sit on the sidelines and wait for the election results.
Looking back to 1990, missing just 10 of the market’s strongest days would have cut revenue in half.
I don’t know when those best 10 days will be.
I don’t know what the best 10 days are, but if you’re not in the market during those 10 days, you probably aren’t paying attention to the election.
Well, in 2016, the market reaction was reversed.
So, it was reversed.
You never know.
Okay.
Thank you very much.
appreciate.
Nice to meet you.
K.
