At this point, everything that can possibly be said about this election has been said. Whether you dislike Trump more than Clinton, or dislike Clinton more than Trump, the horrible, miserable conclusion is just days away.
Investors clearly prefer a Clinton win over Trump. A Clinton Presidency would do little to rock the status-quo, since it’s unlikely that a Republican controlled House of Representatives would allow the passage of ANY substantial legislation.
Markets have been unsettled for 7 straight trading days as Clinton’s early October polling advantage shrank, particularly after FBI Director James Comey’s oddly timed announcement regarding emails of Huma Abedin on the laptop of estranged husband Anthony Weiner. After selling off 3% in the last three days, US stocks are now 4.1% below the July high, though up 5.2% on the year. Our forecast for all of 2016 remains at 10%.
We reassured many concerned clients that if Trump appeared likely to win, four days in advance of the election we would sell all the stocks and equity mutual funds in their retirement accounts in anticipation of a 10% correction in stocks. We wouldn’t sell equity exposure in taxable accounts because the capital gains taxes would generally exceed 10% of the value of the positions.