The 2020 U.S election is a stressful event for most people. On the one hand, there might be a trade war, policy shifts, and the stain of impeachment. On the other hand, it could contain wealth, investments, taxes, and limits on oil drilling. Investors are already in a bad mood. They are growing increasingly frustrated with Donald Trump’s trade war along with other policies. However, they are also frightened by the likes of Democratic candidate Elizabeth Warren whose tough-on-business policies could upend several industries.
Most strategists think that it is too soon to move their portfolios but they also think that investors should be aware of all factors regarding US election 2020. Even though the political climate is unstable one thing is clear: political risk has become a prominent topic for investors. It is not going to disappear. Chief economist at GAM Investment Solutions, Larry Hatheway, said that most investors wish they could invest without regarding politics. He went further to say that this is a nostalgic notion. It is unlikely to be the case ever again. Warren’s recent surge in popularity has scared several companies. It would seem as if she has her sights set on many industries.
Investors always enter the election season with mixed feelings but experts say that investors are facing a particularly confusing election this year. One reason for this uncertainty is political polarization. The economic policy used to be drafted by moderate members of Congress. The current climate offers fewer options of bipartisanship. Experts have noted that the U.S is moving towards a place that is less in the middle but rather on extreme ends of the spectrum. Pair this with the administration’s unconventional operating style. It creates a dangerous climate for investors to play in.
Traders who are concerned over headlines are advised to keep political prognostication out of their portfolios to focus on policies. This means that investors should invest in a stock that is likely going to gain from policy changes that will be made. This does not mean that investors should forget about politics. They can still benefit from political shifts, especially if the market overreacts to a poll. Some strategists are particularly focused on investing in health care because that sector is vulnerable to new government regulations. The same applies to energy stocks, which showed a 5% increase in the past year.
Other areas where the success might be dependent on the election results are technology and education. Both Warren and Sanders want to break up big tech companies that could take place without congressional approval. Another cause for concern is the U.S-China trade war. Experts have advised investors to anticipate a certain political change. Then try to work around it. If it is not favorable, then investors should change their tactics. There are also plenty of other opportunities for investment that falls outside of the political debate.