Bulls, bears, elephants and donkeys: White House races and volatility often go hand in hand.
PRESUMED FRONT-RUNNERS SHOW sudden vulnerability, candidates written off as long shots surge to the front of the pack, and debates grab viewership numbers normally associated with professional football games. The 2016 presidential race has already offered plenty of surprises. But what could it mean for the economy and the markets—and, ultimately, your financial picture?
While the outcome of this race is, of course, still an unknown, history suggests that the markets respond far better to election processes whose outcomes are more predictable, says Mary Ann Bartels, Head of Merrill Lynch Wealth Management Portfolio Strategy. "This time, we've got a lot of uncertainties," Bartels says. "And if there's one thing markets hate, it's uncertainty." The upshot: Markets could be in for a bumpy ride all the way through the November 2016 election.
Start with the fact that President Obama isn't running for reelection. Regardless of a president's party or political leanings, departing two-term presidents create a void that financial markets typically find unnerving, Bartels says.