Mercifully, the 2016 U.S. presidential election cycle is over. The campaign, and the aftermath we are witnessing, was and is an unfortunate, but predictable, demonstration of the lengths politicians, the media, individuals and corporations will go to serve their best interests. Political campaigns and elections are supposed to demonstrate the virtues of the democratic process. Instead, voting has become more and more an implicit contract of dollars for votes. While some voters undoubtedly vote on principal, without thought of personal benefit, many other voters are voting for more fundamental reasons: they expect a financial return on their investment of the time, attention and money they devote to political candidates.
I don’t usually like to comment much on short-term stock market activity, but recent stock market activity, is so unusual, and potentially important, I feel it must be mentioned. Except for long-term investors who pay no attention to short-term swings in the stock market, many “active” investors may be surprised at how quickly financial conditions quickly change. These changes involve day to day stock market volatility, which has recently been nearly non-existent. In the coming months higher market volatility will show itself again, fueling agitation among many investors recently accustomed to more stable financial markets. This is not speculation, but simply reflects the principle of reversion to the mean.
David A. Pace, CFA
Note: These comments and articles are for informational purposes only. Nothing in these articles are meant to provide specific investment advice and are not a substitute for professional advice from a qualified adviser. Since every investor's investment and personal circumstances are unique, he or she should always enlist the help of a competent and trustworthy professional in addressing their financial needs.