The U.S. Presidential Election and its impact on the stock market

The U.S. Presidential Election and its impact on the stock market

What to expect?

President Obama has seen the stock market at its best since World War II during his time in office. But it appears that regardless of the result on November 4, the stock market will soar. This is not disregarding the fact that the tight race is causing a lot of uncertainty in the stock market. The point is that when looking at history, Democrats have outperformed Republicans with regards to the stock market.

Furthermore, when the incumbent wins re-election, the stock market does extremely well and this is more so if the incumbent wins in a landslide. This will not be the case, unfortunately, this time. The presidential race is a dead heat.

There will be a lot of interest in U.S. equities from investors on the other side of the Atlantic as the U.S. economy recovers. Anyway, according to a study by fund manager Ken Fisher of Fisher Investments, either scenario of a Democrat being re-elected or being replaced by a Republican will lead to a rise in the stock market.

I would recommend right now to go ahead and invest in the wider stock market. A low-cost tracker fund can do this for you or you could step up your investing game with an actively managed fund like Findlay Park American. The problem is that actively managed funds have struggled to outperform the stock market as a whole and it might be a better idea to opt for a passive index-tracking fund.

The stock market has been a good predictor of 'who will win the U.S. presidential election' and at this moment it points to a Barack Obama victory.