Markets dislike the close election

Nancy Marshall-Genzer Oct 15, 2008
HTML EMBED:
COPY

Markets dislike the close election

Nancy Marshall-Genzer Oct 15, 2008
HTML EMBED:
COPY

TEXT OF STORY

Scott Jagow: One thing that seems to be adding to the angst in the stock markets is the presidential election. More on that from Nancy Marshall Genzer.


Nancy Marshall Genzer: Jeff Born is a finance professor at Northeastern University. He’s never seen an election year like this one. He’s researched all daily stock returns from 1962 to mid-2001. He built a model on normal investor behavior.

He says investors usually like a close presidential race. They pile money into the market. Average returns actually go up.

Jeff Born: There’s risk. There’s a chance for — if you’re right, you should probably experience even better returns after the elections.

Born says his model isn’t working this year. Doug Roberts of ChannelCapitalResearch.com isn’t surprised. He says the close election is helping to upset an already unsettled market.

Doug Roberts: A good portion of this market problem has to do with fear and uncertainty and right now, when you have something so close, it just adds to that.

Roberts thinks the market will improve after the election.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.