Contact Us

Don’t Panic When Markets Overreact After The Election

New York Stock Exchange 1963

“Don’t panic”—that’s the advice experts are offering investors regarding how to deal with the volatility that’s almost certain to hit the stock market following the US presidential election.

Regardless of how prices change on Nov. 9, next-day moves prove useless for predicting how markets behave during the next 12 months, Bloomberg reports. While the compulsion to react to a sudden shift in the market is often strong, Bloomberg data shows that stocks swing twice as much in the election’s aftermath, so any change should be expected rather than feared.

“Even if the market sells off, if you have any reasonable time horizon, that should be a buying opportunity. The dust will settle and people will conclude the economy is OK,” says PNC Asset Management Group CIO Thomas Melcher. In addition, experts note that in all 22 elections dating back to 1928, the S&P 500 fell 15 times the day after voting, yet stocks recovered and pushed higher over the next year nine out of those 15 times. [Bloomberg]