Is it Over Yet? Thoughts on the Election and Markets

On November 8, 2016, millions of Americans will cast their votes for the next U.S. President. In considering how the new political environment in 2017 will impact the investment landscape, it’s important to keep in mind the words of legendary investor Benjamin Graham: “In the short run the market is a voting machine, but in the long run it is a weighing machine.” Graham was warning investors to avoid focusing on a single-event outcome to the exclusion of other factors. Asset prices can be temporarily impacted in the short term by single events (like an election), but over time, they are driven by the same fundamental factors: interest rates, monetary policy, credit availability, economic growth and earnings.