Elections, Markets, and Uncertainty
Famed Prussian General, Carl von Clausewitz said, “Although our intellect always longs for clarity and certainty, our nature often finds uncertainty fascinating.” Election fascination often causes distress among investors but research shows that your holiday ham can calmly remain in your tummy. The market likes certainty and election days provide just that.
There is always fervent fascination during presidential election years among investors. For markets however, midterm elections typically make more of an impact as Congressional responsibilities affect the economy to a greater degree. While president incumbents and nominees have a larger, national mouth piece, the majority of their proposals must get Congressional approval, hence the reason markets focus more on midterm elections.
This focus on midterms would lead you to believe there are large market swings based on who wins but this is a false notion. Certainty, above all else, provides the environment for stock market gains and election outcomes provide certainty. Steven McBride’s research published on MarketWatch.com found that stocks were higher 12 months after every single midterm election since 1946. 18 of 18. On the flip side, markets averaged around a 1% decline during the 10 months leading up to midterm elections. Prior to an election, there is increased uncertainty of the future and the market discounts nearly every possible scenario leading up to voting day causing pre-election choppiness. Once the election occurs, the future becomes clearer and markets quickly adjust accordingly.
This is echoed by Anne Smith, Executive Editor of Kiplingesque, whose 2016 research found very little correlation between market performance and election results since 1900. While the fascination may be on who wins on Election Day, the market seems to find solace in knowing that there is a winner more than who it is. While there are plenty of reasons to be proudly preoccupied with our democratic process, the affect it has on your investments shouldn’t be one of them.
By Caleb Cronic
Raymond James & Associates, Inc.
Caleb Cronic
Caleb joined the Otterson-Allison Wealth Management Group of Raymond James in 2017, bringing with him the lessons he learned from serving as a lieutenant in the United States Navy. Caleb served as a commissioned officer in the Navy for six years, completing multiple deployments to the Middle East. He first served onboard USS JAMES E WILLIAMS, a destroyer out of Norfolk, VA and later served as the Anti-Terrorism Officer onboard USS NEW YORK in Mayport, FL before finishing his service as an Operations Officer and Intelligence Oversight Officer at COMLCSRON TWO.
Caleb holds a Bachelor’s degree in International Relations from the United States Naval Academy. In addition, he has a Master’s degree in Public Policy from Liberty University as well as the Accredited Asset Management Specialist accreditation.
Caleb’s wife, Kristin, also a Naval Academy graduate, is a local artist. Caleb is currently the United States Naval Academy Alumni Association Jacksonville Chapter President, USNA National Trustee and a trustee at his local church. Outside of work, Caleb enjoys baking, travel, and spending time with his creative wife, Kristin, and their two children, Eleanor and Bode. What energy is left over is devoted to reading and an inconsistent game of fetch with the family dog, Herschel.
Patricia Otterson
In 1982, Patty left her career as a CPA to pursue her fascination with the equity markets. And for more than 31 years since, she has had the pleasure of working in a truly dynamic industry and the privilege of serving truly wonderful people.
Patty got her start with the accounting firm of Ernst and Whinney (the precursor to Ernst & Young). After spending several years as a CPA and tax accountant, she left to begin her investment services career at Dean Witter Reynolds (now Morgan Stanley Smith Barney). She also held positions with Prudential Securities, where she began her partnership with Norm Allison in 1994, and Alexander Key (a division of SunTrust Investment Services) before joining Raymond James in 2009.
A graduate of Grove City College:, Patty holds a Bachelor of Arts in accounting. In addition, she has earned the Certified Investment Management AnalystSM designation and her Investment Strategist Certificate from The Wharton School of the University of Pennsylvania.
Patty’s commitment to community is evident in her involvement with several local organizations. She is currently serving as co-chair of the DePaul Society council of Ascension St. Vincents Foundation. She is also actively involved with St. Johns Presbyterian Church, where she previously served on the board of deacons and also as an elder. Previously she served on other boards in the community that serve the needs of children in underprivileged areas.
Patty Otterson was among the Raymond James-affiliated advisors named to the Forbes list of America’s Top Women Advisors. The list, which recognizes advisors from national, regional and independent firms, was released online April 21, 2020.
Check out the Forbes 2020 Top Women Wealth Advisors https://www.forbes.com/top-woment-advisors/#28abc5bd51f4
Investment Management Consultants Association is the owner of the certification mark “CIMA®,” the service marks “Certified Investment Management AnalystSM,” “Investment Management Consultants AssociationSM,” and “IMCASM.” Use of CIMA® or Certified Investment Management AnalystSM signifies that the user has successfully completed IMCA’s initial and ongoing credentialing requirements for investment management consultants.
The Forbes ranking of America’s Top 1,000 Women Wealth Advisors, developed by SHOOK Research, is based on an algorithm of qualitative and quantitative data, rating thousands of wealth advisors with a minimum of 7 years of experience and weighing factors like revenue trends, AUM, compliance records, industry experience and best practices learned through telephone and in-person interviews. Portfolio performance is not a criteria due to varying client objectives and lack of audited data. Research Summary (as of April 2019): 32,000 nominations were received based on thresholds (9,654 women) and 1,000 won. This ranking is not indicative of advisor’s future performance, is not an endorsement, and may not be representative of individual clients’ experience. Neither Forbes nor SHOOK receive a fee in exchange for rankings. Raymond James is not affiliated with Forbes or Shook Research, LLC. Please visit https://www.forbes.com/top-woment-advisors/#28abc5bd51f4 for more info.
Raymond James is not affiliated with the above organizations and/or charitable causes. Raymond James does not provide tax or accounting services.
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