Is anyone waiting until after the election?

[Loandapper]

I know, I know: Time in the market, not timing the market.

BUT:

I have some new cash (about 6% of total portfolio) and I'm curious whether anyone else is waiting until after the US election in 45 days?

[Normchad]

I’m not. All my investments are on auto-Pilot. They happen every payday, and the first of every month regardless of what is going on in the world.

[muffins14]

It’s 6% of your portfolio. Even if it went to zero after the election, it might not even trigger a rebalance event.

Just invest it

[lostdog]

I know, I know: Time in the market, not timing the market.

BUT:

I have some new cash (about 6% of total portfolio) and I'm curious whether anyone else is waiting until after the US election in 45 days?

https://advisors.vanguard.com/insights/ ... 4742233743

"You can help to ease clients’ worries about their investments during this election cycle by showing them the facts about past elections’ effect on market returns. Decades of research demonstrate that election years have no statistically significant impact on market returns or, for that matter, volatility."

[FIby45]

Is anyone? Sure. Am I? Nope.

[milktoast]

Well... supposedly the market hates uncertainty... so isn't there a risk of a post-election pop?

[Normchad]

Well... supposedly the market hates uncertainty... so isn't there a risk of a post-election pop?

Great point.

[runner3081]

Absolutely. Waiting until after the election for Christmas and Thanksgiving to come.

Can’t wait that long for Halloween though.

[Loandapper]

I know, I know: Time in the market, not timing the market.

BUT:

I have some new cash (about 6% of total portfolio) and I'm curious whether anyone else is waiting until after the US election in 45 days?

https://advisors.vanguard.com/insights/ ... 4742233743

"You can help to ease clients’ worries about their investments during this election cycle by showing them the facts about past elections’ effect on market returns. Decades of research demonstrate that election years have no statistically significant impact on market returns or, for that matter, volatility."

This is timely and helpful. Thank you!

[GreenLawn]

Less than 2 months away, if you'll feel better by waiting, go ahead. I'm anticipating some volatility, but have no idea whether it'll trend up or down.

[Volkdancer]

Of course not!

[whodidntante]

Someone I respect told me that he is 50% cash right now. For most people, I would facepalm. But he is getting up in years, so 50% fixed income is not an unreasonable allocation.

For my own money, I'm staying in. I know how to access cheap leverage, and I'll put that knowledge to work if there is a market panic.

[tdc]

Apart from my automatic 401(k) contributions, I am waiting and moved a significant chunk of taxable investments into cash. I think there is a strong case to be made that "this time is different". However, I can't support that case without violating forum rules against political discussions.

[Loandapper]

For my own money, I'm staying in. I know how to access cheap leverage, and I'll put that knowledge to work if there is a market panic.

Can you be specific about this? What are your plans?

[Ed 2]

I know, I know: Time in the market, not timing the market.

BUT:

I have some new cash (about 6% of total portfolio) and I'm curious whether anyone else is waiting until after the US election in 45 days?

I can’t wait . In order to wait or do something else I will have to change my auto investing. Actually I never wait for anything since I am on auto pilot with contributions in my index funds.

[whodidntante]

For my own money, I'm staying in. I know how to access cheap leverage, and I'll put that knowledge to work if there is a market panic.

Can you be specific about this? What are your plans?

Absolutely, but not in this thread. I'm also a thread timer and this thread is on short time.

[tibbitts]

I know, I know: Time in the market, not timing the market.

BUT:

I have some new cash (about 6% of total portfolio) and I'm curious whether anyone else is waiting until after the US election in 45 days?

Did you wait in 2016? What was the result?

[Raybo]

I am waiting to decide where to live. My wife is from the UK. So, leaving the US is a possibility but the end of 2020 is when Brexit will hit the UK. At the moment, my investments assume I stay in the US.

[nisiprius]

Well, I'm in retirement and I'm not contributing, but I'm not taking any actions based on there being an election. When I was working and my employer had a 401(k), I didn't change anything around election times.

I haven't looked at the data and I'm not going to try. I would not be surprised if it turned out that there was an increase in volatility in the months before and after an election, but I would be astonished if you could reliably predict whether the market would go up or down--with precise enough timing to benefit.

I don't trust any predictions, but I completely ignore anything that involves a chain of more than one prediction. In this case, there are two, and neither of them is even close to being a sure thing. 1) Who will win? 2) How will the market react to a victory by candidate X, versus candidate Y?

Oh, OK, let's just take a quick look at Jeremy Siegel's Stocks for the Long Run. Chapter 16, table 16.3 shows that on the average there was an average of an 0.1% rise from 1 day before to 1 day after over 1888-2012, but a -0.3% fall over the period 1948-2012. The difference makes me think personally that this is just noise. More interesting are the average by presidential year of office: 7.7%, 3.0%, 13.0%, and 8.4% for the first, second, third, and fourth years. So it is actually the third term that is the best. I am just reporting what I see in the book, not suggesting doing anything about it.

[lazynovice]

I am certainly not selling right now and still doing my regular investing which is higher due to COVID deferred travel etc.

If I had a large (for me) amount to invest and I was nervous, I’d consider waiting even though it is frowned upon here. In times where I believed there was an imminent drop and I had a large bonus to invest, I have paid down my mortgage and done other “battening down the hatches” type of things that gave me a guaranteed small return, which made it easier to invest more aggressively when the downturn came. I have done this 2 or 3 times.

Most of the time when I have a large amount to invest, I just put it in at my AA whether that was in January 2020 or May 2020.

[beernutz]

I am holding a small amount in cash, less than 1% of NW, above and beyond an emergency fund to buy a dip. If we don't have a dip, I'll be fine and just consider that money extra emergency fund. I'm going to need some cash at the beginning of the year anyway to put $7k into my Roth and fund Roths for my adult daughters. My monthly 403b contribution is still going 80% to index equities and 20% to TIAA Traditional--that isn't changing.

Otherwise my investments are locked in for the duration.

[burt]

Nope, I pulled the plug a few weeks ago.
Went from 30/70 in US index funds to 30/70 in Target Retirement Income fund.
I like the International diversification.
Seems like I read somewhere that the only "free lunch" is diversification.

[yangtui]

No, why would I do that? I suggest that you stop watching the news and focus on things that matter.

[Third Son]

I know, I know: Time in the market, not timing the market.

BUT:

I have some new cash (about 6% of total portfolio) and I'm curious whether anyone else is waiting until after the US election in 45 days?

I'm putting it all on 7 and letting it ride...... Um, no.

[StormShadow]

I know, I know: Time in the market, not timing the market.

BUT:

BUT BUT BUT nothing. Timing the market is a loser’s game.

This time... it’s NOT different.

[yangtui]

I know, I know: Time in the market, not timing the market

Apparently you don't know.

[Trader Joe]

I know, I know: Time in the market, not timing the market.

BUT:

I have some new cash (about 6% of total portfolio) and I'm curious whether anyone else is waiting until after the US election in 45 days?

No, not me. I invest when I have the money.

[BernardShakey]

I know I have no ability to predict anything related to financial markets. I just auto-invest into retirement accounts every payday and then to taxable every Friday, rain or shine.

[Broken Man 1999]

Nope.

I stay as fully invested as I can, so I don't have any loose $$$ to hold until after the election.

Broken Man 1999

[bling]

nope. every pay check if there's spare money i buy to meet my AA.

what makes you think whatever's happening in the election isn't already priced in?

in fact, if you go back to 2016 and look at what happened between oct-dec the election basically had no/minimal impact on the S&P 500 (take the dates off and it looks like any random 3 month period), and this was with a major upset according to polls at the time.

[wander]

Sure. I rebalance before or after an election if there is any offset.

[tim1999]

No, I stay the course and don't do anything differently because of an upcoming election. Besides, whatever I think is going to happen after any given candidate wins or loses never seems to actually turn out that way in terms of market reaction.

[Normchad]

Unless your timeline is incredibly short, it just won't matter (to your long term financial results) what the outcome is.

Or if you think it does matter, in a meaningful way, what would you do *differently* if the election went in *the bad direction*. If I was convinced of those things, and convinced of my knowledge, and the election went in *the bad direction*; I'd still be investing in US stocks and bonds. I wouldn't be happy, but it would still be in my very best interests to do the same exact thing I'm already doing.

But nobody can know that. And the data from the past strongly suggests it just doesn't matter.

Time in the market!

[baconavocado]

I think there are two reasons to be cautious about the next two months: 1) the election, as you mentioned, it may not be decided for weeks after election day and as we all know, markets hate uncertainty; 2) October can be a very volatile month for markets.

If I received a chunk of cash right now, I'd sit and wait for dips in the market during the (presumably) upcoming period of volatility, but I wouldn't sit on it forever. I'd place a time limit on it - if no or few opportunities to buy on dips appeared by mid-December, I'd invest it anyway.

[arcticpineapplecorp.]

if you want to make the three mistakes investors make during election years:

Mistake 1: Investors worry too much about which party wins the election
Mistake 2: Investors get spooked by primary season volatility
Mistake 3: Investors try to time the markets around politics

source: https://www.capitalgroup.com/advisor/in ... -year.html

now find out why they're mistakes by clicking on the link above.

so do you go through this angst every 2 years because there's an election every two years, right? You gonna go through this every 2 years for the rest of your life? see how silly that is? see my signature.

[lazynovice]

Looking at September 20, 2016, S&P 500 closed at 2,139.76. The day after the election, November 9, 2016, it opened at 2,131.56. That’s a negligible difference to me but you’d pick up a bit waiting.

2012

September 20, 2012 close 1,420.26
November 7, 2012 opening 1,428.27

Waiting would have been a bad idea but still negligible if it gave you peace of mind

2008
September 19, 2008 close 1,255.08
November 5, 2008 opening 1,001.84

Waiting was a good idea by a lot. Of course October 2008 was a pretty crazy time. Not sure I’d bet on that happening again but in my lifetime, I don’t know if I have seen a crazier year than 2020.

I am always happy to market time with someone else’s money.

[arcticpineapplecorp.]

I know, I know: Time in the market, not timing the market.

BUT:

I have some new cash (about 6% of total portfolio) and I'm curious whether anyone else is waiting until after the US election in 45 days?

you don't know that it's time in the market, not timing the market.

because you used the word "But" and it was a Big BUT. And the word But negates everything that comes before it.

So do you really know that it's time in the market, not timing the market?

or do you just think it's a clever phrase but don't really believe it?

be honest with yourself.

[Nicolas]

No matter who wins it will go up. The reason is relief, the market hates uncertainty.

[000]

I know, I know: Time in the market, not timing the market.

BUT:

I have some new cash (about 6% of total portfolio) and I'm curious whether anyone else is waiting until after the US election in 45 days?

you don't know that it's time in the market, not timing the market.

because you used the word "But" and it was a Big BUT. And the word But negates everything that comes before it.

So do you really know that it's time in the market, not timing the market?

or do you just think it's a clever phrase but don't really believe it?

be honest with yourself.

No. "But" is not a complete negation of what came before it. Usually it is a partial negation or qualification of the preceding.

"The sky is blue, but not at night" does not negate that the sky is blue, it qualifies it by indicating one of the times when it isn't.

[arcticpineapplecorp.]

I know, I know: Time in the market, not timing the market.

BUT:

I have some new cash (about 6% of total portfolio) and I'm curious whether anyone else is waiting until after the US election in 45 days?

you don't know that it's time in the market, not timing the market.

because you used the word "But" and it was a Big BUT. And the word But negates everything that comes before it.

So do you really know that it's time in the market, not timing the market?

or do you just think it's a clever phrase but don't really believe it?

be honest with yourself.

No. "But" is not a complete negation of what came before it. Usually it is a partial negation or qualification of the preceding.

"The sky is blue, but not at night" does not negate that the sky is blue, it qualifies it by indicating one of the times when it isn't.

fine, if that's true, in this case, the OP is using the word BUT to indicate sometimes it's ok to time the market and is asking if now is one of those times.

is timing the market ever the right strategy even if it may occasionally yield a good outcome?

what does the evidence show about market timing?

[000]

fine, if that's true, in this case, the OP is using the word BUT to indicate sometimes it's ok to time the market and is asking if now is one of those times.

is timing the market ever the right strategy even if it may occasionally yield a good outcome?

what does the evidence show about market timing?

Yes, timing the market can be the right strategy, but only if one has high confidence and a plan in case one is wrong. This does not appear to be the OP.

The "evidence" shows that most market timers fail. Just like most new business ventures fail. Doesn't mean one should never try.

[arcticpineapplecorp.]

I know, I know: Time in the market, not timing the market.

BUT:

I have some new cash (about 6% of total portfolio) and I'm curious whether anyone else is waiting until after the US election in 45 days?

Q: When should I buy?
A: When you have the money.

Q: When should I sell?
A: When you need the money.

If you have the money and don't need the money, then why isn't it invested? Fear, pure and simple. how's that working?

[corp_sharecropper]

I'm waiting. I've stopped investing in taxable account at the very end of August, just happened to be when I felt like dealing with undoing some of the automation. Not much I can do in the 401k due to choices and size of the next few contributions. I'm also putting off deployment of a decent sized cash/MMF position into my taxable investing AA. This isn't even a lump sum vs DCA question in my mind. Whatever potential gains I might give up over the next 45 days or whatever, pales in comparison to the potential drawdown and volatility that could occur that is absolutely unique to a presidential election, much less this particular election. And all I have to do is wait a little over a month to avoid the regret? Yes please, that's a no-brainer. I really don't care about even the most optimistic possible market performance in this time frame, the range of positive market moves in the next month is smaller than the negative ones, it's really absurd to pretend otherwise in this specific moment in time.

Pretty much 99% of situations I say go ahead and invest now, this isn't one of those. This isn't timing the market, at least not for greed, this is a purely risk aversion or anti-volitility play, I have no doubt my Sharpe is likely to improve and yes, I can "eat" risk adjusted returns. I've made up my mind and can't be convinced otherwise in this specific case so let's not de-rail the OP's question about theoretical what-ifs challenging my specific view, simply just telling the op my opinion.

[pasadena]

No. I just invested my bonus last week. I also have a total of $15k coming in between early October and November 1st, and that will be invested right away too.

[warner25]

I'm waiting... potential drawdown and volatility that could occur that is absolutely unique to a presidential election, much less this particular election.

I'm not looking to argue with your decision, just curious if you are worried about a potential drawdown due to the incumbent being reelected or due to a transition of power? It's really not clear to me what anyone would be waiting for in this situation. I suspect that markets have already priced in the likelihood that there will be a transition of power. Like what would be the decision point to put your savings at risk in equities again?

[Van]

Yep, I'm waiting.

I've had some CDs come due in the last couple of months, and two more will mature at the end of September. With CD rates so low, I have not been able to make a decision on where to invest the proceeds. New CDs are not attractive to me at all.

With real serious turmoil a possibility after the election, cash seems like my friend right now.

[baconavocado]

I'm *expecting* increased volatility during the next few months. When the market dips, I'm preparing to:
1) sell bonds and buy stocks;
2) transfer tIRA assets to Roth IRA accounts.

[JD2775]

Not waiting, but then again I don’t have a significant amount of money waiting on the sidelines. Just normal monthly excess money to taxable

[Grt2bOutdoors]

No, as the funds come in, they get invested. Wait for what? You miss the 10 best days of the market and you will miss more than 90 percent of the returns. What do you think is going to happen-don’t answer that because no matter what you think does not make it fact. It may or may not happen. No one knows.

[JBTX]

I know, I know: Time in the market, not timing the market.

BUT:

I have some new cash (about 6% of total portfolio) and I'm curious whether anyone else is waiting until after the US election in 45 days?

So what is the premise -

That you will wait and decide whether to invest, depending on who wins? One wins you invest, the other wins, you don't?

That you wait and buy the day after, regardless of who wins? You are betting that you will realize the election is over before everybody else and will jump back in before they do?

Are you going to wait until the day after the election? Or are you going to wait until the election has been "decided" and the winner is not in dispute? Again, you are thinking you can outsmart everybody else and get in before they realize the election has been decided?

If the market starts going up the week before the election, are you going to still wait?

If the market starts going down right after the election, are you going to immediately jump back in, or try to time "the bottom"?