What Next?: A Post-Election Reality Check

The Dividend Cafe

The Dividend Cafe - The Bahnsen Group

Macro Economics, Monetary Policy, Dividend Growth Investing, Retirement Planning, Wealth Management, Investing, Business, Estate Planning

4.9 • 572 Ratings

🗓️ 6 November 2020

⏱️ 24 minutes

🔗️ Recording | Apple Podcasts | RSS

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Summary

November 3 has come and gone, and while the results may not yet be fully etched in stone, we have a pretty good feel for where things are headed. I suspect there are two camps of you who read the Dividend Cafe, and I do not refer to partisan leanings. What I mean is that I imagine many are excited to not hear about the election any longer, and then there are many who want to wrap their arms around everything as fully as possible (as far as what it all means to the economy and markets, etc.). I want to do a bit of both, personally. I want to accommodate that latter group today, providing as much useful analysis of where we go from here as possible, and then I look forward to having a lot less to say about the political implications of, well, most things.

The fact of the matter is that the political dynamic (a) Always affects markets to some degree, not just in a week like this one; and (b) Always has much, much less of an impact than people believe it does. Policies matter. And there are impacts in both macro and micro parts of the economy and investment markets that stem from policy decisions. But many investors have been utterly confounded over the years (including this week) by markets seeming to respond differently than they expected in response to some political outcome.

Investors who find themselves surprised by a market reaction to a particular political outcome that is different than they expected it to be can be forgiven since truth be told, market reactions confounding people’s expectations is the normal state of affairs. Much of it has to do with the ability of markets to have already priced in a certain outcome before it happens, meaning what seems to be a market response to something is really the market now adjusting to something else – that the market was ahead of the news headline.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Transcript

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0:00.0	Welcome to the Dividing Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life.
0:12.8	Well, hello and good morning. Good afternoon. Whatever time it is you're listening to this welcome to the weekly dividend cafe podcast and
0:23.4	video um it's just been a whirlwind of a week and i'm sure a lot of you feel the same way i really
0:32.0	um can't even believe it's friday i mean i don't know it isn't that i don't it doesn't
0:37.1	like friday it just sort doesn't feel like Friday.
0:37.7	It just sort of could feel like any day. I'm on about two to three hours of sleep now for
0:42.7	three nights in a row literally. And I, and it's not even really the sleeplessness at night and all
0:49.6	the busyness and things. But then in the daytimes, with market action and all the things going on,
0:57.3	it just feels like incredibly and painfully busy time right now. And yet that's all in the
1:04.5	backdrop, obviously, of the election and the uncertainty of certain things. And maybe now,
1:10.2	partially some of the certainty.
1:12.3	I think that there are, we do know a lot more right now than we did a week ago.
1:16.2	And we know a lot more than we did two or three days ago, even after the immediate parts
1:20.8	of election results.
1:22.3	And so I'm going to force myself as I did in the written dividend cafe this week, to really stay focused on the task at hand, which is covering for you, I think, investment and market and economic implications of where we are.
1:39.4	And try not too much to get distracted by a lot of the what ifs and could bes and this and that
1:45.4	because those things are impossible to forecast.
1:49.2	The margins in a couple of states are so tight and there could be recounts and there could be lawsuits.
1:56.2	And there is right now an incredible amount of social angst that's building up.
2:00.6	And what I've chosen to do in the, in the objective hat of of discounting what I think is
2:08.6	most likely to happen and what that means to the clients for whom I manage money and in
2:15.3	the positioning of what we're thinking about macroeconomically, I've chosen to look to
	...

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