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Election day 2020 - exercise your constitutional right and get out and VOTE

by Fortem Financial November 3, 2020

We have been asked many times and in many different ways what our thoughts were on the election over the last few months. We must tell you, we look at this purely through an economic lens. There are many social issues that come and go as time moves forward, but our job is to understand the economy and that is what we like to focus on.

For months we have been saying the markets are usually what we look at in trying to understand the elections. However, because of the Coronavirus, it has been much more difficult to sort out economic gain vs government stimulus. Still, we think the S&P 500 gets it right more than not.

We have noted before that the S&P 500 has been a useful indicator and has predicted 20 of the past 23 presidential election winners. If stocks are higher in the three-month period before the election, the incumbent party has won, and if stocks are lower, the opposition party has won. Yesterday’s 1.2 percent rally placed stocks slightly above their August 3rd level. We will close this indicator at 4pm today. In 2016, stocks were down in the three-month period before the election and were at odds with the polling. This was disregarded as noise. Similar arguments are being made today. We believe this indicator has worked historically because the stock market reflects the current and future outlook of the US economy, which translates into the current voter sentiment. The indicator did not work in 1956, 1968, and 1980 where other issues than the economy mattered in the elections, and that could be the case today. But at the very least, this indicator seems to suggest the race is closer than the consensus is expecting.

EITHER THE CONSENSUS IS WRONG OR STOCKS ARE NOT A VERY GOOD PREDICTOR OF THIS ELECTION

I copied the headline above straight from our October 18, 2016 report. At the time, stocks were down 2.5%, and, if the historical pattern held, stocks were indicating what seemed unbelievable at the time: that Trump would beat Clinton. Like today, investors believed that “other” factors were more important for stocks than the election, and the expectation that the Fed would begin to raise interest rates was weighing on stocks. Today’s debate is similar in that the explanation for stocks being up is due to “other” factors like monetary and fiscal policy stimulus coupled with the promise of vaccine approvals coming online.

We should know the results over the next few days and see if once again the S&P 500 was able to predict the election outcome. Please call or email us with any questions you may have.
Source: Strategas

Sincerely,

Fortem Financial
(760) 206-8500
team@fortemfin.com

 

Brian Amidei, along with Partners Joseph Romano and Brett D'Orlando have also been named *2014, 2015, 2016, 2017, 2018 Five Star Wealth Managers!

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Awards and recognitions by unaffiliated rating services, companies, and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Fortem is engaged, or continues to be engaged, to provide investment advisory services; nor should they be construed as a current or past endorsement of Fortem or its representatives by any of its clients. Rankings published by magazines and others are generally based on information prepared and/or submitted by the recognized advisor. Awards may not be indicative of one client’s experience or of the Firm’s future performance. Neither Fortem nor the recognized advisor has paid a fee for inclusion on a list, nor purchased any additional material from the award provider. The criteria for each award is listed below:

Five Star Professional Disclosure:
The Five Star Wealth Manager award is based on 10 eligibility and evaluation criteria: 1) Credentialed as an investment advisory representative (IAR) or a registered investment advisor; 2) Actively employed as a credentialed professional in the financial services industry for a minimum of five years; 3) Favorable regulatory and complaint history review; 4) Fulfilled their firm review based on internal firm standards; 5) Accepting new clients; 6) One-year client retention rate; 7) Five-year client retention rate; 8) Non-institutionalized discretionary and/or non-discretionary client assets administered; 9) Number of client households served; and 10) Educational and professional designations. The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by Five Star Professional or the magazine. The award methodology does not evaluate the quality of services provided. Additional information about this award is available at: fivestarprofessional.com/2016FiveStarWealthManagerMethodology.pdf
Fortem Financial 2016. All rights reserved.

Data Sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market Data: Based on reported data in WSJ Market Data Center (indexes); U.S. Treasury (Treasury Yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness.

Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. The opinions expressed are solely those of the author, and do not represent those of Fortem Financial, LLC or any of its affiliates. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful. Forward looking statements are based on current expectations and assumptions, the economy, and future conditions. As such, forward-looking statements are subject to inherent uncertainty, risks, and changes in circumstance that are difficult to predict. Actual results may differ materially from the anticipated outcomes. Carefully consider investment objectives, risk factors and charges and expenses before investing. Fortem Financial is a registered investment adviser with the SEC. Advisory services are offered through Fortem Financial.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighed index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

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