First off, we would simply tell you, not to overreact.
Either way, the markets may see a whipsaw as institutions take advantage while leaving retail investors to make rash decisions.
We think one way to make volatility your friend, is to put some bids below the market on your favorite stocks. For example, look to some of the market leaders in the large cap space. This could be anywhere 5-7% below the market, in the case we get a large and irrational selloff for either scenario.
We must remember the bigger picture. The federal reserve is behind the scenes. They will most likely be cutting rates this week and possibly again in December. Historically, rate cuts have boosted stocks!
Much of the markets movement comes down to earnings and interest rates. With AI ‘big’ spend on top of it, the markets have been supported all year.
If you are considering getting involved, it should always be incremental and we believe that allocation changes should never be one fell swoop. Don’t let the emotions get the better of you.
If your candidate did not win, there is no need to sell everything off. This will not make any sense either.
Throughout our history we know our founding fathers got it ‘right’. They have done a really good job to prevent a dictatorship. We still have the judicial, legislative, and executive branch hanging in different balances.
While the election will probably create a divide in the country, and many will disagree with one another and be upset, we still have that balance of power.
We are looking forward to the election being over as it has been an event risk for the entire year. Now we can get back to the basics which is interest rates, earnings, and AI’s future.
We believe we are setup for a strong end of year rally for many reasons. Two of which are a possible chase scenario by the bears. First, they finally must capitulate. Second, performance anxiety from large money managers who may have missed the big moves in certain names.
If you have any questions, please call our office.