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Like with all elections, there is a difference between what politicians say they will do, and what they actually end up accomplishing. Or whether they even try in the first place.
The market doesn’t care about the promises of politicians. So, traders need to focus on what is likely to happen regardless of political inclination.
Although polls are narrowing, projections by most analysts still indicate a Joe Biden win.
We already know what a Donald Trump presidency looks like, so what might change?
The market reaction
Historically, when there is a new President, the market doesn’t do so well.
There is a diverse range of explanations for it, but the S&P 500 averaged a gain of just 5% in the six months following a change in president over the last thirty years.
Compare that to a little over 30% gain when the president was reelected.
Also, from the same time span, Democratic presidencies have seen faster growth in the stock market than Republican ones, contrary to popular pe...
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