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Here is Who’s Likely to Win the November Election and What it Means For Your Portfolio

Here is Who’s Likely to Win the November Election and What it Means For Your Portfolio

Posted On September 25, 2020 11:34 am
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The current market decline is being blamed by some investors on rising election uncertainty.

That’s certainly one plausible explanation for the S&P 500’s current pullback, which is flirting with correction territory.

Fortunately, while this election is perhaps the most important in history, occurring as it is during a pandemic that shattered the US economy and threatens to push it back into a double-dip recession, we have some pretty powerful tools for forecasting who is the most likely winner in November.

Biden Is Heavily Favored To Win The White House

Every day FiveThirtyEight, the most accurate forecasters of US elections since 2008, input the latest polls, and via the most advanced model of any media outlet, run 40,000 simulations of the election.

(Source: FiveThirtyEight)

Biden’s probability of victory has been stable in a range of 70% to 80% since June 1st, and he’s currently returning to the upper end of that range.

Now probabilities are NOT certainties, such things don’t exist in our world. There will be just one election, not 40,000 but by simulating 40,000 daily elections with the best available data, FiveThirtyEight is able to tell us the probabilities of all the most plausible and not so plausible outcomes.

However, as useful as this tool is for data nerds like me, there is a far more important race to watch than the Presidential one.

Who controls the Senate is likely to determine the fate of the currently gridlocked stimulus debate, and according to Moody’s, whether or not the US is likely to fall back into a recession.

The Democrats Are Slightly Favored To Win The Senate

(Source: FiveThirtyEight)

According to 538, the Democrats have a 61% probability of winning control of the Senate, most likely ending up with 50 or 51 seats.

Real Clear Politics agrees, saying that if the current Senate polls prove accurate Democrats would end up with 51 seats and control of the chamber.

Whatever your personal political leanings are, what matters for your portfolio is what’s likely to happen, not what you want to happen.

So here is what a Democratic Sweep which is looking more likely with each passing day, is likely to mean for your portfolio.

What An Increasingly Likely Democratic Win Means For Your Portfolio

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About author

Dividend Sensei
Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I'm a proud co-founder of Wide Moat Research, Dividend Kings, and the Intelligent Dividend Investor. My work can be found on Seeking Alpha, Dividend Kings, iREIT, and the Intelligent Dividend Investor. My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams and enrich their lives. With 24 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and income streams and achieving long-term financial goals.

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2 Comments

  1. Joyce Lofmark September 25, 2020 at 4:49 pm

    Certainly hope you are wrong. It will be horrible for the country and I don’t think I will want to be in stocks.

    • Dividend Sensei September 28, 2020 at 11:31 am

      “If you mix politics and investing you’re making a big mistake.” – Warren Buffett

      Here is who is NOT worried about the election and recommending investors sell stocks before November 3rd.

      UBS (one of the 16 most accurate economists in the world)
      Goldman Sachs (one of the 16 most accurate economists in the world)
      Moody’s (one of the 16 most accurate economists in the world)
      Bank of America (one of the 16 most accurate economists in the world)
      JPMorgan (4th largest asset manager on earth)
      Vanguard
      Fidelity
      Charles Schwab
      BlackRock (largest asset manager in the world)
      Ritholtz Wealth Management (were Ben Carson, Michael Batnick, Joshua Brown, and Nick Magiulli all work)

      Here is who is convinced that selling all stocks is a good idea before the election.

      – short-term traders

      Trust the quality and financial strength of your companies as well as your overall portfolio construction/risk management, not trading tips you find on Facebook or Twitter.

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