What an election campaign! Or should I say, what a run-away train! With only a few days left until the big day, who will win?
First, can we trust the polls? I would say for the most part a big resounding no. The reason is that polls are skewed to embellish the candidate of choice based on the leanings of the media. For example, CNN is for Clinton and Fox is for Trump.
One of the best historical gages in determining the winner, is how the American stock market has performed in the 3 months or so before the election. It has predicted the winner every time since 1984 according to Strategas Research Partners LLC.
So here’s the deal. A gain in the benchmark for American stocks in the three months prior to a vote has seen the incumbent party win 86% of the time since 1928. At this point in time, the benchmark is down 3.6% since August 8th which favours the challenger, so in this case Trump.
Many factors weigh into the equation historically, such as the economy, political and global uncertainty, consumer discontent and much more, so this time around, I believe that given the unique circumstances of this election, coupled with the Federal Reserve stimulus, makes this election a toss-up at this point.
Whoever wins, will either bring in a new era of change or a government, grid locked in investigations, innuendos and lawsuits. Too close to call, but if it was my call, simply based on market history, Trump will win.