Howard Marks on the Post-Election Markets

In last week’s Barron’s, Oaktree Capital’s Howard Marks reflected on the presidential election and offered a wealth of insight regarding both its complexities and its multi-layered and far-reaching implications. With specific regard to the markets, Marks posed the question: “How could the expectation of a Clinton victory make stock prices rise, and then the reality of her defeat make them rise further?” He explained: “The market often fails to act rationally in the short run, primarily because of the role played by people in determining its course.” In his lengthy essay, Marks delved into a range of economic and political […]

Politics and Investing: Don’t Go with Your Gut

Research shows that the effect presidential elections have on investment decisions is based primarily on whether or not an investor’s favorite candidate wins or loses. In a recent Wall Street Journal article on the subject, Mark Hulbert says that this takes precedence over, for example, the projected economic affects related to one candidate over another. “If their favorite ends up in the Oval Office,” Hulbert writes, “they will tend to be more confident about the market and take on more portfolio risk.” He argues, however, that “going with an unexamined gut instinct can lead people to make bad moves.” The […]