🐪Hump Days #016

Volatility Incoming?

Hello friends! Welcome back to another edition. Before we start, I have a shameless plug:

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In the News

• Snapchat Stock is up nearly 30% today in trading due to Q3 earnings - it seems that more and more people are using Snap (mostly Gen-Z) and their revenues are beating expectations now.

• The next Presidential Debate is tomorrow night at 9-10:30PM Eastern - here’s everything you need to know.

• Pope Francis expresses his support for same-sex ‘civil unions’.

• The U.S. has filed an antitrust lawsuit against Google. That’s the NYTimes Article - if you want a FULL breakdown - read this article from Stratechery.

How does the Election affect the Stock Market?

The vast majority of investors — 93% — believe the Election will affect the stock market, according to a recent survey from Hartford Funds, an asset manager. Moreover, 84% said they expect that will impact their investing habits.

Now, should you actually change your investing habits or not? The answer is NO.

The S&P has traded positive in each six-month period before a presidential election except 2008. And, historically speaking, "Since 1833, the Dow Jones industrial average has gained an average of 10.4% in the year before a presidential election, and nearly 6%, on average, in the election year. By contrast, the first and second years of a president’s term see average gains of 2.5% and 4.2%, respectively.” (source)

Zoom out a bit. Consider the above chart. “The stock market has gone up—and down—under all presidents. But over time, the trajectory has been positive. Getting too hung up on what-ifs over the next four years means losing sight of the big picture.”

The one thing I want to bring up this year is that volatility might be increased by quite a bit this year because of the pandemic and delayed voting results. MarketWatch’s William Watts reports that the S&P 500 tumbled more than 8% between the Nov. 7 election in 2000 and the Dec. 15 - when a recount was necessary to decide the winner of the election.

We may see some increased volatility this year, especially knowing that there may be some confusion around election results. Brace for volatility, and stay true / consistent to your investing strategy.

WFH Station of the Week

“I will never financially recover from this” is an apt title for the below :)

Latest Video - Roth IRA vs Traditional (9:48)

What exactly is the difference? In yesterday’s video I explain it simply!

Let me know how I can improve the newsletter - always thinking of ways on how to get better…

- Humphrey