During the US election: How investors can remain smart

During the US election: How investors can remain smart

In the center of the financial world, everything trembles before the upcoming US election! The big donors are wondering: How will the election result influence the markets? At Dimensional Fund Advisors, one of the leading investment companies with a huge managed assets of $ 740 billion, the discussion is boiling about the effects of this decisive choice.

Hardly any political argument causes as much excitement as the upcoming duel between the democratic vice president Kamala Harris and the former Republican President Donald Trump. The race is so exciting that the nationwide surveys show both candidates practically on par. The outcome of the choice is completely open and could cause massive movements on the financial markets, which for many investors becomes the question of the hour.

A look into the past: How close elections the markets changed

There are countless opinions about the elections, and many investors think loudly about the potential effects. Thomas Meinke, investment director at Dimensional Germany, notes: "We have examined the developments in the US stock market in almost 100 years and have not found a uniform pattern that shows that the election result alone determines the market." Since 1926, the share prices have risen regardless of whether a democrat or a Republican was in power.

"The past 97 years show that many external factors have far more influence on the markets," explains Meinke. Interest, economic developments, geopolitical tensions and technological advances are just a few of these decisive factors that should not be neglected. Kluge investors not only focus on the presidential election, but also keep an eye on the big picture.

volatility and congress control - what does that mean for investors?

The uncertainty that choice brings with it could cheer on volatility on the market. Investors are wondering whether you should retire better from the stock market beforehand. But here is the surprise: the statistical data show that the returns usually do not differ drastically from those of other months in election months. There is no constant recurring pattern that occupies catastrophic effects on the markets.

Another mystery remains the control of the congress. Will the Republicans keep the upper hand, or will the House of Representatives shared again? Nevertheless, Meinke comes to a sobering conclusion: "Even control over the congress turned out to be an unreliable indicator of the development of the markets." Whether the congress is calm or interrupted, the stocks fell or climbed - the markets stubbornly follow the trend of time.

"In summary, everything indicates that the attempt to make investment decisions due to the election outcome is not only speculative, but can also be expensive," concludes Meinke. Investors should not be blinded by the political stage, but rather follow a solid, long -term plan. And as the founder of Dimensional, David Booth, aptly formulated: "Choose with your voice, not with your savings."