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How Will The 2020 US Presidential Election Affect Stock Markets?

Is there an investing strategy that one can use to profit from 2020 US Presidential Election?

2020 US Presidential Election

Historically, S&P 500 volatility has typically been higher in election years than in non-election years, as markets frequently reprice the probability of the future administration’s policies.

Since 1932, an incumbent US president has never failed to win re-election unless a recession has occurred during their time in office.

If you examine the return of the S&P 500 Index for each of the 23 election years since 1928, you'll see that in only four of them was it negative.

However, this year may not be as straight forward as the data may suggest.

4 Year Presidential Cycle

The most profitable year of a presidential cycle is the third, followed in order by the fourth, second, and first.

Based on widely published research, the 3rd year of presidential cycle has proven to be one of the best years to invest.

In fact, a research published by Marshall...

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Negative Oil Prices: What does it Mean and How to Profit from Record Low Oil Prices?

The price of one American oil futures contract crashed on Monday into the negative for the first time in history.

The May WTI crude contract CL.1, -113.23% CLK20, -113.23% closed at -$37.63 a barrel, a one-day drop of $55.90, or 306%, according to Dow Jones Market Data. Those prices—at negative $$ per barrel—mean that companies must now pay a buyer to take oil off their hands and store it if they want to exit the market. 

Since the COVID-19 epidemic started, S&P500 crashed over 30% to 2192+/- from the high of $3393.52 in just matter of 4weeks. Dow Jones, Dow Transport, Nasdaq and Russell 2000 all suffered similar fates. However, market panic was nowhere else as pronounced as in Crude Oil.

Crude Oil Price War

On 8 March 2020, Saudi Arabia initiated a price war with Russia, facilitating a significant fall in the price of oil. Over a few weeks, US oil prices fell by 34%, crude oil fell by 26%, and Brent oil fell by 24%. The price war was triggered by a breakup in...

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How the CORONAVIRUS is Impacting Global Stock Markets

Outbreak of coronavirus or Covid-19 has resulted in crippling stock markets world over.

After hitting all time 2weeks ago, S&P500 has crashed over 10% in less than two weeks and the results are not much different elsewhere in the global markets.

Not All Asset Classes Are Down

Though there are several ways one can slice and dice asset classes, for this article I will assume four major asset classes and exclude cash and currencies:

  • Bonds US 30 years
  • Gold using Gold Futures
  • Stock Markets such as Dow Industrial, Dow Transport, S&P500, Nasdaq and Russell 2000
  • Commodities such as Crude oil

Since the crash began on 21st Feb, safe heavens assets like US Bonds have outperformed broader stock markets by roughly 15-16%.

US 30 Years Bonds have rallied +5.23% while S&P500 down -10%.

Surprisingly, Gold which acts has a safe heaven during uncertain times, didn't deliver great results either during these 8days period.However, ever since coronavirus outbreak was spreading from early...

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