4:58 PM PT
Olympia, WA
Now that the results of the election have been confirmed, I wanted to highlight some of the research that has come our way that discusses the topic.
Michael Cembalest from JPMorgan put out another really informative piece on the impact of the election results. You can read it here - “Kamilton”: the 2024 election and who tells your story
He went in depth on several topics, but one study he mentioned that I found interesting was a study out of the University of Chicago that looked at the performance of mutual funds during Covid based on the political affiliations of the investment teams. The study found that both Republic oriented teams and Democrat oriented teams underperformed non-partisan teams. Biases are known to be detrimental to decision making, so it’s no surprise that a political bias would hurt investment results.
Russell Clark, who always puts out good content, discussed his thoughts on the election result here - THE NEXT STAGE IN WESTERN CIVILISATION DAWNS
“In the short term, the obvious trades will work. Long S&P 500, gold, bitcoin and short treasuries. In the longer term, I would bet on politics in the rest of the world turning more violent.”
Richard Bernstein, founder of Richard Bernstein Advisors, put out his thoughts after the election here - The Morning After
“Tariffs and movement to less efficient production suggest investors should position for higher secular inflation. Accordingly, bond market volatility is unlikely to subside. Truly tactical fixed-income investing could gain in importance.”
Feelings run high around elections, but the actual impact of political change is always more muted than the feelings would suggest. For investors, one big thing to keep in mind is that the political cycle is not typically correlated with the economic cycle. I happened to see this post by Lars Phillips on LinkedIn ahead of the election, and I think his message is important for long-term investors to acknowledge.
