investing for the election

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Mike O
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Joined: Mon Nov 18, 2019 12:29 pm

investing for the election

Post by Mike O »

a buddy of mine just sold all his stock holdings and bought government securities expecting another huge drop in the market. The idea is that biden is gaining momentum and if he wins the market would take a hit (some say up to 25%) due to roll back of trump tax breaks for corporations plus the increased taxes to fund all the "free stuff".

I'm not much of a speculator or gambler and to me that's what he's doing, but I am curious to see how it works out. to see which one of us does better in the long run with different strategies.

expecting that if Trump wins he would buy back in and have lost some gains along the way but if biden wins he'll have saved himself from the inevitable losses and be able to buy back in at a lower cost. we all know you can't time the market, you'll never know where the true bottom or top is but his idea isn't to find rock bottom or the tippy top but to take advantage of what some consider an inevitable market reaction to both covid and a biden presidency and be able to see some significant gains in a short term.

I dont' care about your political opinions, how you vote is on you not up for discussion, at least not here. I'm just curious what other think about the market movements in relation to the election and if anyone else is trying to or going to try to dip into the gambling market during the next few months. I'm hoping to be FI in 8 years so my time line is shorter now and not really interested in taking such a big risk. I'm a buy every paycheck guy hopeing that the dollar cost averaging strategy pays off.
runner3081
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Re: investing for the election

Post by runner3081 »

Locked in... 3, 2, 1.

This topic is against the forum guidelines.
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Artful Dodger
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Re: investing for the election

Post by Artful Dodger »

I'm not making any move based on the upcoming election.

Do yourself a favor and take a look at how the S&P has performed when we've had D presidents compared to R presidents.

I do have concerns about how the virus will play out and how that will affect earnings. My take is we'll run bigger deficits due to the pandemic than any plan the Ds come out with. And, who knows what the Fed will do.
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arcticpineapplecorp.
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Re: investing for the election

Post by arcticpineapplecorp. »

Mike O wrote: Thu Jul 09, 2020 3:41 pm a buddy of mine just sold all his stock holdings and bought government securities expecting another huge drop in the market. The idea is that biden is gaining momentum and if he wins the market would take a hit (some say up to 25%) due to roll back of trump tax breaks for corporations plus the increased taxes to fund all the "free stuff".

I'm not much of a speculator or gambler and to me that's what he's doing, but I am curious to see how it works out. to see which one of us does better in the long run with different strategies.

expecting that if Trump wins he would buy back in and have lost some gains along the way but if biden wins he'll have saved himself from the inevitable losses and be able to buy back in at a lower cost. we all know you can't time the market, you'll never know where the true bottom or top is but his idea isn't to find rock bottom or the tippy top but to take advantage of what some consider an inevitable market reaction to both covid and a biden presidency and be able to see some significant gains in a short term.

I dont' care about your political opinions, how you vote is on you not up for discussion, at least not here. I'm just curious what other think about the market movements in relation to the election and if anyone else is trying to or going to try to dip into the gambling market during the next few months. I'm hoping to be FI in 8 years so my time line is shorter now and not really interested in taking such a big risk. I'm a buy every paycheck guy hopeing that the dollar cost averaging strategy pays off.
how do you define the long run?

because you're talking about a short term timeframe like an election. even a presidency. not to mention this is all speculation and your friend doesn't know anything that anyone else doesn't already know (and he can be wrong. he can also be right, but for the wrong reasons).

just because you're f.i. in 8 years doesn't mean you'll no longer need investments. presumably you'll live for decades more, right? so what does what happen over the next few months even matter?

your friend will keep bouncing in and out of the market everytime some news event happens. that doesn't go well. it's called market timing.

inevitable losses, huh? inevitable. love that. so sure he is.

by the way, if you look at the long term return of the market, my understanding is there's been no significant difference after accounting for inflation between administrations of differing political parties. what's happened in the past is actually the market has done better in democrat administrations (so that's opposite of what your friend believes), but inflation has been higher. And while the stock market's done worse under repub administrations, inflation's been lower. So the real returns have been similar enough to my knowledge. I'll try and find that in a chart, unless someone else can. In other words, much ado about nothing. Stop worrying about the news and start investing for the long term, which is longer than a few months.

in before the lock.
Last edited by arcticpineapplecorp. on Thu Jul 09, 2020 3:52 pm, edited 2 times in total.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
Adam11
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Re: investing for the election

Post by Adam11 »

Mike O wrote: Thu Jul 09, 2020 3:41 pm ...
I'm hoping to be FI in 8 years so my time line is shorter now and not really interested in taking such a big risk. I'm a buy every paycheck guy hopeing that the dollar cost averaging strategy pays off.
It’s hard to predict the future. And since you’re here, you already know the answer you’re seeking. But why potentially destroy all your years of hard work and diligence over what is at best a 50/50 gamble?
02nz
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Re: investing for the election

Post by 02nz »

This will be locked momentarily, but I'll just point out that everybody in the market has access to polls and cable news. The possibility of a Biden presidency has already been priced in (whatever that actual impact is, which no one really knows).
livesoft
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Re: investing for the election

Post by livesoft »

Before the lock: The election will remove uncertainty and the stock market will absolutely take off! Total positive all the way, cannot see any negatives from the election.
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Topic Author
Mike O
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Re: investing for the election

Post by Mike O »

not sure why it would be locked, it' snot a political post, it's an investing post.

I'm not going to sell my stuff, I'm going to stay the course. I'm just bored and curious if anyone out there was thinking of making adjustments based on the national election in the next few months.

my friend is 10 years younger than me with no asperations of early retirement or FIRE for that matter. He's lookin at about 30 more years till retirement.

yes I'll still invest after FI, probably still work but FI is the turning point where I change from investing for growth to investing to hold what I got.
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1789
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Re: investing for the election

Post by 1789 »

Elections have minimal impacts on developed nations markets. It will not matter much in USA.
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Gufomel
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Re: investing for the election

Post by Gufomel »

You mean like the expectation that a Hillary win would lead to rising stocks and a Trump win would lead to declining stocks? That common opinion persisted all the way through 2016 election night as stock futures plummeted as it became clear that Trump was about to win. Except, the market opened up the next morning and continued to rise.

That was literally the most recent presidential election, and yet everyone wants to say with seemingly extreme confidence that stocks will drop if Biden wins and rise if Trump wins.

Nobody knows nothin. At least not with any degree of certainty that is actionable for predicting future direction of the market.
DesertDiva
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Re: investing for the election

Post by DesertDiva »

Develop an IPS and stick to it, regardless of what may (or may not) happen.
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climber2020
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Re: investing for the election

Post by climber2020 »

Here's an all time classic from around 4 years ago that is related to this topic: viewtopic.php?f=10&t=203792

It didn't go so well, but maybe your path will turn out differently.
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arcticpineapplecorp.
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Re: investing for the election

Post by arcticpineapplecorp. »

that's a good article. I bookmarked it. Will be sure to repost it every 4 years (or two years for midterms) everytime this question comes up (which it does again and again and again...)
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
minimalistmarc
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Re: investing for the election

Post by minimalistmarc »

The market will be pricing in whatever they think the chance of either candidate winning is, and how that candidate might affect profits.

Basically, trying to time the market on facts that are widely known is pointless.
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Re: investing for the election

Post by LadyGeek »

This thread has run its course and is locked (politics - now discussing market moves by individual politicians). See: Politics and Religion
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