Elections don’t move the markets, uncertainty does

Value: $13,431 | Loss: -$840 | Return: ▼6% | Dividends: $15
Weekly Dividend Portfolio Update - 10.26.2020 - 10.30.2020

We are 2 days away from elections. 93+ million Americans have already voted, including me. As last week’s sell-off showed, fear-induced volatility in stock markets is at an all-time high. Investors, both new and experienced, are concerned and want to know:

  • Will the elections be contested?
  • How soon will the stimulus be approved after the elections?
  • Will the second wave of Coronavirus be as deadly (or worse) than the first wave?

No one really knows what will happen, but that doesn’t mean we can’t speculate.

I think elections will be contested, and the Supreme court will pick the next President of the U.S. The stimulus bill will pass before Thanksgiving, and the second wave of Coronavirus will not result in a shelter in place similar to the one witnessed in March of this year.

That said, the data around the elections and the stock market is trivial and relative.

Such as:

  • Stocks do better right after the incumbent Republican President wins.
  • Since 1930, the Dow Jones has gained 10% in the 1st year after the election and 8% in the second.
  • When Americans think a Republican might win, the Stocks do better in the lead-up to elections.
  • When a new party comes into power, stocks gain an average of 5%. When the incumbent party is re-elected, the average is 6.5%.

I can go on, but you get the point. The more data you have, the more you look for meaning. In the meantime, I will leave you with this:

In the long-run, the market goes up. In the short run, uncertainty causes volatility. If you know what you are investing in and what companies you own in your portfolio, you will ride this wave.

All things considered, it’s still been a good year.

Hang in there. And please go VOTE.

Let’s do the numbers.

For the Week

Value: $13,431 | Loss: -$840 | Return: ▼6% | Dividends: $15 | Investment: $460

The markets took a hit last week. If you have been following me for a while, you know that I jump in with both feet when there’s a dip. And last week, I invested $460 in the following companies:

And I received dividends from:

  • QYLD: $14.36
  • SYK: $0.29

Portfolio All-time (10/30)

Value: $13,431 | Gain: +$562 | Return: ▲4% | Link to portfolio: M1 Finance | Website | Excel

Projected Dividend Income

Annual: $528 | Monthly: $44

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