Round Table Chief Investment Officer Nathan Dutzmann coauthored an article explaining why we don’t treat (or recommend treating) U.S. elections as a market-timing signal, regardless of outcome.
Here’s a teaser/takeaway:
“[The stock market] is currently and has always been aware that an election is today. And while it doesn’t know the outcome, it has marched upward this year, nonetheless. This is because the occupant of the White House is just one of many variables that affect the economy and the stock market. The market peers into the deep future, projects out expected corporate cash flows across all those years, and then discounts them back to a current price via a discount rate (the market’s “expected return”) high enough to justify the risk that future cash flows may underperform expectations. The election is just one of a near infinite number of data points that affect those calculations.”
Details in the article: The Stock Market Knows There is an Election
Details are in the article: https://www.advisorperspectives.com/articles/2024/10/30/dream-long-term-care-insurance
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