Second, there is still a lot of time left. Due to the Electoral College math and superior fundraising and organization, Mrs. Clinton seems the odds-on favorite to win. But we still have a few weeks left. We’ve got one more debate to go, and with these two candidates, the final weeks offer a higher-than-usual chance for more bombshells (perhaps something in Donald’s tax returns or Hillary’s missing e-mails?).
For sport, we’ll continue to handicap the outcome like everyone else, but if Brexit has taught us one thing, it’s that betting on the conventional wisdom can be dangerous. With too many variables still unknown, including the election winner, the make-up of Congress, or how proposals will morph into policy, long-term market implications are uncertain. To be sure, neither candidate has presented a convincing pro-growth policy that would boost economic activity or the equity markets.
Regardless of the winner, Washington gridlock won’t likely produce major policy changes, although some modest corporate tax reform is possible. While long-run return implications are uncertain, we still believe that Mr. Trump’s newcomer status and lack of policy history would make him the source of more short-term volatility.
Guessing whether Mrs. Clinton will be bad for healthcare stocks or Mr. Trump will be good for defense/military stocks is a poor way to build a durable portfolio.
David Lafferty is Senior Vice President and Chief Market Strategist for Natixis Global Asset Management, U.S. Distribution, where he heads up the Investment Strategies Group.
His team is responsible for assessing capital market trends and supporting affiliated portfolio management teams. He has been with Natixis since 2004. Previously, he was senior vice president responsible for fixed-income and asset allocation products with State Street Research and a senior investment strategist at MetLife. Mr. Lafferty received a BA from the University of New Hampshire and an MS in finance from Suffolk University. He is a member of the Boston Security Analyst Society and is a CFA® charterholder.
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