A disputed outcome to the upcoming U.S. presidential election in November is now the primary concern for investors, topping a second wave of coronavirus.
This is according to a survey carried out by deVere Group, who asked over 700 clients ‘What is your biggest investment worry for the rest of 2020?’
The number one investment worry was a contested U.S. election (72%); the effect of a second wave of Covid-19 (18%) and the U.S.-China trade war (5%). The remaining 5% was comprised of geopolitical issues such as Brexit.
The 735 people who took part in the poll are resident in the UK, North America, Europe, Asia, Africa, Latin America, and Australasia.
We can clearly see that investors across the globe are starting to become seriously concerned about the U.S. presidential election.
However, it’s not about whether Trump or Biden comes out on top, it’s about the impending possibility of a disputed outcome.
As it stands, President Trump is already questioning the election’s legitimacy, increasing the chances of a contested result and subsequent constitutional crisis in the world’s largest economy.
Therefore, investors have become increasingly fearful that this will lead to massive bouts of volatility in the markets in the U.S. and around the world.
It’s highly likely that any volatility stemming from the election will have an immense impact for perhaps two to three weeks.
As always, investors should remain in the market at this time. Indeed, to my mind, there are two key reasons why investors should build up their portfolios during times of volatility.
First are the benefits over the long-term. Of course, there are many unknowns, but the performance of stock markets does tend to go up over the longer-term.
As such, for this very reason, investing in equities over the long-term is typically universally recognized as