The November 8 general election undoubtedly will impact the economy. Magazines, newspapers and television stations have been reporting for months about a probable plunge in the stock market come the morning of November 9, no matter who wins the office of president, Democrat Hillary Clinton or Republican Donald Trump.
Will interest rates rise? Will the real-estate market, after a slow-but-steady rebound this year, tank? Will the cost of living for average American consumers increase? And what about income taxes and the national debt? Analysts and economists have been coming out of the woodwork to prognosticate about such issues and so have influential business owners.
Kevin Swift, of the National Association for Business Economics, said more than 10 percent of its members are waiting until after the election to make decisions about hiring and investments, according to The Washington Post. Swift further said more than 50 percent of its members think the election will be a definitive drag on the dollar.
“Nobody said it was positive,” The Post quoted him as saying.
Marc Faber, author of a newsletter titled Gloom, Boom & Doom Report, was more dire, telling Bloomberg neither candidate will have a remotely positive effect on the market.
“Given the alternatives, I would vote for Mr. Trump because he may only destroy the U.S. economy, but Hillary Clinton will destroy the whole world,” Faber said.
Mark Cuban, billionaire owner of the Dallas Mavericks, thinks Clinton will do less damage, pointing out she has not only a plan but also a way to tackle it, whereas Trump is more vague and notoriously reactionary.
One “can’t act as a standalone entity” in what has become a global financial situation, Fortune magazine quoted Cuban as saying.
It seems the soothsayers are spooked, and that should be expected. But there is a bit of good news, if history is any indication. Investment analyst Gregg Fisher said presidential politics, over time, has played only a cameo role, so to speak, in the fate of private portfolios, not a starring one.
“There’s no empirical evidence to suggest that who the president is, whether Republican or Democrat, should cause you to want to deviate from your investment strategy,” Fisher told Money magazine.
He advises the public to keep its emotions in check, avoid getting sucked in by soundbites and visualize the past, present and future of any financial plan.
Brian Jacobsen, a banker at Wells Fargo, agrees. “Human beings are pattern-seeking, storytelling animals,” Jacobsen said. “We’re very good at telling stories about patterns that don’t necessarily exist.”
History tells us that the economic impact of a Presidential election is overstated, no matter who wins. Make sure to head to the polls on Tuesday, November 8, to cast your ballot and elect the next President of the United States.