Colony Market Brief

October 28, 2020

Presidential elections often cause investor angst. And next week’s election is perhaps one of the most emotionally charged in decades. We’ve prepared the attached commentary to share our perspective.

  • History shows that the political party in power is not a significant driver of long-term investment returns. That’s not to say US presidents and politics don’t impact the economy and markets—but so do lots of other factors like the actions of foreign leaders, changes in interest rates, technological advances, and a global pandemic, to name a few. 
  • As we’ve stated in the past, developing portfolio strategy isn’t based on making predictions about the future but being prepared for a range of potential outcomes. Therefore, we’ll approach this election as we’ve done in the past by looking through to other fundamental drivers of financial markets and being ready to take advantage of potential volatility if presented with attractive investment opportunities. And as the election results and policies that follow become clear, we’ll carefully reassess our views and outlook.     
  • In terms of the current macro backdrop, we believe that what happens with the coronavirus will have the biggest impact on near-term economic growth. Thus, an unusually wide range of potential economic outcomes exists. Against this backdrop, proper portfolio diversification may be as important as ever.  

Please click here to read our Brief Market Commentary on the upcoming US Presidential Election.