Post by
Experienced on Jun 23, 2024 8:52pm
US Election Polls and Investment Decisions
Right now in the US I have a sense that the polling is not accurate. That said, I don't know which way they are wrong. Sounds crazy? Yep!!
I have the feeling that many who are polled and are Trump supporters are afraid to admit it. Conversely, based on a recent SCOTUS decision, illegal aliens can lie and get to vote since they authorities are not allowed to check if they are US citizens (crazy but true) but these people aren't in the polling sample. In fact the Biden people are taking advantage of this and handing out voter registration cards to illegal aliens as they cross the US southern border. How many actually take advantage of this and intend to vote is anybody's guess. Could these factors cancel each other out? I suppose bit I doubt it.
Generally, when there is uncertainty, asset prices are lower to account for the risk and yet right now the markets are at or near all-time highs. Why is that? Main reason is the unprecented deficit financing by the US Gopvernment which is instilling a huge stimulus to the US economy. The market right now is feasting on this stimulus.
The problem with all this can be illustrated by the following.... the average interest on the debt in the US over the past year and a bit has risen from 1.8% to 3.2% primarily due to the US Government financing the deficit and refinancing previous debt with short term treasuries which are quite high in terms of interest rates (inverted yield curve) and in fact higher than longer term debt. This higher interest rate has resulted in the debt payments for this fiscal year rising to about a trillion dollars. To put this number into perspective, the TOTAL Government spending on everything under the first Bush President in 2000 was 1.8 trillion. So the current interest on the debt is now more than half of what was spent on everything about 25 years. The interest payments under the CBO forecast will rise even more over the next 10 years.
From a political of view and tying this to economics is that neither Trump nor Biden will do anything to reduce the deficit and in fact both have proposed initiatives which will increase the ongoing deficits and hence future interest payments. So in that sense, whether the polls are wrong or right, the future holds big problems from a debt point of view at some pojnt in the future.
So with all that as background, what am I doing?
The caveat to the following is that my investment objectives may well be different from others here and so everyone needs to consider what they do based on their own situation. For me, I am keeping a healthy percentage of my asset allocation in cash and trading activitly (ie getting in and put quickly) is centred around keeping this cash balance. I have also derisked my portfiolio with a higher than normal (for me) allocation to preferred shares and fixed income in general.
Comment by
Marty47 on Jun 23, 2024 9:50pm
Let's see Thursday debate 8pm , I bet they will juice up Joe lol poor man he won't make another 4 years .
Comment by
ztransforms173 on Jun 24, 2024 9:59am
- INTERESTING, SH DELETED your PREVIOUS POST on Trump MAGA versus ILLEGAL ALIEN VOTERS BEING UNDERCOUNTED in PUBLIC OPINION POLLS z173