Getting green from red and blue
Despite the punditry, markets don’t really care about elections. Here’s why you should look past the politics.
It’s a monumental year for democracy. There are 83 national elections taking place across 78 countries this year—there are more elections than countries because of European Union (EU) membership. In Britain, voters just kicked the Conservatives out of government and elected the left-wing Labour Party. The French gave the right-wing National Rally party their seal of approval in the first round of votes. And in America, the presidential campaign is heading into its final act.
Like punters at the horse races, many investors are trying to predict upcoming ballots. They reckon that’ll give them an edge and help them adapt their investing strategies based on who they think will win. But it won’t. Apart from some short-term market volatility in the first few days, elections and their results hardly impact markets. As counterintuitive as it seems, investors should probably ignore them.
Markets don’t care which party is in power. For example, since 1900, America has had 31 presidential election…