Do you have a stock strategy when the US election results settle down (whenever that may be)?

Business Money
1

What are you thinking?

I figure there are 2 different outcomes from the election: a mandate or no mandate. If Biden wins and the Democrats sweep or if Trump wins and the Republicans keep the Senate, then there’s a mandate and the markets will react quickly and climb. If Trump loses and challenges the election, or the apparent winner is a different party than whoever controls the senate, then the markets will muddle through for days or weeks.

Here are some views in the news earlier this month.

7 Oct

21 Oct

Oct 2020

6 Oct

Here was his view back in May

In the case where markets look to gain (whether because of a mandate like I propose above, or for whatever reason and the outlook seems positive), how might you proceed? I’m 20% in cash and will look to invest in a combination of structured notes, managed funds, and index funds (or ETFs) over a period of time.

And in the case where markets muddle through? Maybe look for Covid-friendly sectors? I don’t know - would really like your perspectives on this angle

2

I have a strategy! Here is the rough gist:

80% of my assets are currently invested in stock ETFs (specifically SCHD and SCHB), and 20% are invested in bond ETFs (specifically SCHZ). Before/after the election, I will not sell/buy anything. Every once in a while (not timed to correspond with major world events), I will check that 80% is still in stocks and 20% is still in bonds, and if not, sell/buy to rebalance.

There you go! It’s as simple as that.

3

It’s hard to say. The recent market has been disrupted by small investors. Wall st can react one way while Robinhood investors can go another.

4

GDP is going to explode in Q3…by like 33% I’ve read.

5

I think a lot of hedge fund managers got played this crash when everyone was selling off and the Robin Hood users used it as an opportunity to load up on cheap stocks.

6

How do SCHD and SCHB differ from ETFs like SPY and QQQ? Are they more expensive because they are “branded”? I am looking at VOO as well

For the 20% in Bond ETFs, did you mean SCHZ?

I gotta look up how a Bond ETF works - is it still a passive instrument?

7

Thanks. I’ll look at this closer. Maybe these might help

https://www.cnbc.com/2020/10/20/the-gdp-report-next-week-will-likely-show-record-breaking-economic-growth-but-it-may-not-help-trump.html

8

That’s a good article as it will say what happens if a strong diversion from what’s been happening…er…happens…I predict.

9

US stock futures fell between 0.9 and 1.6%, pointing to another drop on Wall Street later, when investors will have to digest a slew of earnings from the likes of Boeing, Visa, Mastercard and Etsy. Yields on 10-year US Treasuries fell to their lowest in over a week, reflecting investor demand for safe-haven assets.

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Looks like others are also raising cash - (1) seeing Covid problems in Europe, and (2) anticipating a dip in the US that could lead to bargain hunting in a downturn if election-related uncertainty spikes next week

Any thoughts on these funds to ride on over the next few months:

(5G) Neuberger Berman 5G Connectivity

https://www.nb.com/en/global/5G-connectivity

https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F0000156JS

(AI) Allianz Global Artificial Intelligence

https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000YS7N

10

Food, sex, medicine/narcotics. In that order. Everything else is speculation.

11

My plan is to have an investment guy do all the work so I can play video games and read historical non-fiction books while I’m not working, taking care of my kids, or wasting time here.

12

Which historical non-fiction are you reading these days?

13

Cicero by Anthony Everitt. I love Ancient Rome and Cicero specifically, and I’ve been on a legal/philosophical kick recently. I finished the Federalist Papers a bit ago, moved back to Locke, then to Plato (who I’m also reading).