Transcript
Hello, everybody, welcome to today. Well, the S&P 500 was down almost 2.4%. Today, unfortunately, and it was a fairly broad sell off, I’m often talking about the 415 targeted stock market indexes that I’m following. Only nine of them were positive today and the rest are negative. So pretty big day as far as that goes, unfortunately. And, you know, we’re doing, you know, issues right now, one being the stimulus package isn’t going to happen, not happen. I think that’s the biggest issue, because is the economy strong enough as it is to keep things rolling? Or do we need more money. And so that’s what we’re going to be kind of finding out. And that’s what the market is thinking about there, too.
But the presidential election is another area. And this is something I’m going to dig into for those of you that are attending the lunch with Tom, I want to thank everybody that has signed up so far. And basically, what I’ve done so far is just take a look at the last 10 election. So 40 years, going back to 1980. I’m going to take the S&P 500 investment in Vanguard, okay. And so according to Morningstar, if we look at the three months before each one of those elections, the average rate of return was .8%. So basically breakeven, that three months after each of those 10 elections, the average rate of return was 4.8%. positive.
So just to summarize, before an election, the market generally goes sideways. And then after election, it goes up. It makes some sense, there’s some, you know, concerns about who’s going to be president and then once we know that certainty certainly helps. There’s some seasonality that plays in there also, and whatnot, too. But there are a couple of interesting exceptions. There’s only two times that the market was down in the three months after presidential election, once was in 2008. That’s really we were in the middle of a massive, you know, financial, worldwide disaster that was happening. And so that makes some sense.
The other one instantly enough was in 2000, where we had a contested election. And of course, that’s what people are concerned about. Now. That was down 6.1%. You know, so not terrible, as far as that goes. But that is why there’s some, you know, talk about that. And it’s why I’ll talk about it in the lunch with Tom, just because I am getting a lot of questions about it, we can dig into that a little bit deeper. If we look at the three months, you know, before this election, that would start on August 3. And if we look at that, up until today, the S&P 500 is down about .8%. So really, pretty much in line with the average that we’ve seen long term over that 40 year period so far, you know, we’re not there yet. So we’ll see what happens. But so anyway, that’s what’s happening right now. I look forward to seeing what’s going to happen tomorrow. See if we get a bounce and I will talk to you then. Thank you very much.