Today is Voting in the US, the media has like always been successful in creating a lot of hype around the election. As soon as elections are over, the media will focus on FED Meeting in December and then probably UP elections. You can’t be buying and Selling based on these media hypes.
I am not denying that there was no Risk in these events, the problem is there are very few in this World who can predict these events and even fewer who can do it consistently. To make money you need Luck, to create wealth you need consistency.
We at Stallion Asset have taken the easier way, we look at companies which can double their Profits in 2-3 years i.e. growing at 25-35% and have high return of capital employed. We only Invest in 3 sectors in any given cycle, WE CATCH THE TREND AND MANAGE OUR RISK.
So the Question is How will US Elections impact Sensex and your Portfolio?Lets see what are the scenarios that are possible
1)Hillary Wins, Market Rises 1-2% and sustains there
2)Hillary Wins, Market Rises 1-2% but doesn’t sustain (Inverse Brexit)
3)Trump Wins, Market Falls 3-4% and sustains there
4)Trump Wins, Market Falls 3-4% and starts a new Mini-Bull Market
We don’t know which scenario will play out but can expect an average volatility of 2% on election result day.
Lets see how US Election results have affected Sensex in last 36 years. The markets have done well regardless of the president.
The Markets have historically performed Better when the republicans have been in Power. (Donald Trump is Republican whereas Hillary Clinton is from the Democrat)
Conclusion – “Far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in corrections themselves” -Peter Lynch. Don’t fall prey to media hype, have a consistent strategy of Wealth Creation. Every 6 months there is a new worry in the market, as much fun it is talking about it, wealth creation is a boring job and need patience.