Most investors know you can’t time the market, but so many of us never stop trying.
Conventional wisdom among many investors, especially Republicans, is that the stock market would turn south with a Joe Biden win. While there is still plenty of time for things to sour, the initial reaction by the stock market has been incredibly positive with the S&P 500 up 3.70% since last Wednesday morning. Is that a market reaction to Joe Biden winning? Is it a reaction to Donald Trump not winning? This all assumes the current results stand. As the Weekly Market Review details, the stock market rally most likely is a reaction to a split Congress, or an anticipated split Congress based on what happens in Georgia.
To be fair, the gains which occurred during the Monday, November 9th stock rally was more about the exciting news from the hopeful Pfizer vaccine trials which THIS USA Today article details. The markets view a safe and effective vaccine as a clear pathway to getting back to normal. Industries such as hotels, airlines, oil, and banking saw giant increases in their stock prices.
I know I share too many quotes from Warren Buffet, but I think the following suit the times so well:
“Widespread fear is your friend as an investor because it serves up bargain purchases”
“In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497”By the way, it has been a while since Warren said this. Twenty years into the new century and the DOW sits as 29,157.
“We’re buying businesses to own for 20 or 30 years. We think the 20- and 30-year outlook is not changed by the coronavirus”
This week’s Weekly Market Review breaks down many statistics surrounding the election and the grossly inaccurate polling that occurred prior to the election. The Notable Numbers for the Week does not disappoint with several intriguing facts.
As always, we hope your find the Weekly Market Review both informative and interesting. Have a nice week!
Trevor N. Coe, CFP®