In just a few short days, a nearly 2-year long Presidential race comes to a close and, hopefully, a clear winner will assume the title of President-Elect.
Who will it be? And how will it affect your money?
Let’s take a look:
The Story
This Tuesday, two of the most polarizing, unpopular candidates ever will compete to become President of the United States.
Fortunately for them, you don’t have to win the “popular” vote to become President. The Electoral College decides who wins, making the race a somewhat-complicated numbers game.
So let’s break down the key numbers…
Key Details
270 — The number of electoral votes needed to win the Presidency.
55 and 3 — The number of electoral votes given to California and North Dakota, respectively, because the former is the most populous state and the latter is one of the least.
268 — The number of electoral votes that will go to Hillary Clinton if she wins every projected “Solid Democrat” and “Leans Democrat” state, according to CNN.
204 — The number of electoral votes that will go to Donald Trump if he carries every projected “Solid Republican and “Leans Republican” state.
64 — The number of electoral votes Trump will have to win from “Battleground” and/or “Leans Democrat” states to win the election.
Florida — A must-win state for Trump, where he trails Clinton 48.2% to 47.2%. Florida has a 17.5% chance of being the “tipping point” state and casting the deciding electoral college vote. Hopefully they’ve fixed any issues with “hanging chads.”
Utah — The only state with 3 serious contenders vying for its electoral votes. If Evan McMullin pulls off an upset, he’ll be the first non major-party candidate in 48 years to pick up electoral votes.
The 12th Amendment — If McMullin does the improbable, and his 6 electoral votes from Utah prevent Clinton or Trump from reaching 270, the House of Representatives could choose to make McMullin President thanks to the 12th Amendment to the constitution.This was Gary Johnson’s strategy all along.
The Bigger Picture
Those are the stats on the election, but let’s take a look at the markets:
1980 — The S&P 500 just had its longest losing streak since 1980, falling 9 days in a row.
$1,300+ — Gold, a hedge against uncertainty, has surged to a one-month high of just over $1,300 an ounce.
$100 billion — That’s how much market capitalization the stock of tech giants, Facebook, Amazon, Netflix and Google lost combined in the last week; and it’s the biggest drop since February.
Markets usually improve in the days before an election, so what is going on here?
Some people point to the tightening of the race.
The theory is that investors were comfortable with Hillary Clinton winning the White House because she is predictable. Her policies are not always pro-business, but she has been friendly to investors in the past.
Trump, on the other hand, is not seen as predictable, and investors hate uncertainty.
That’s not to say that either Clinton or Trump’s economic plan is better than the other’s, it’s purely a measure of the mood of stockholders.
So if Trump wins, you may see some serious jitters and precautions taking place in the markets in the short term.
Winners and Losers
Prediction time: who is going to win?
The New York Times says if Hillary loses, it’d be like an N.F.L. kicker missing a 38-yard field goal. Possible, but not likely.
Of course that’s the New York Times, so what other predictions are being made?
Trump Wins — The S&P 500 has a strong track record of predicting which party will win the election. If the index declined from August 1st to October 31st, then the party not in power wins the Presidential election 86% of the time.
And since the S&P 500 declined ~2% during that period this year, this predictor points to a Donald Trump victory.
Clinton Wins — On the other hand, the Moody’s Analytics model has successfully predicted the President every time since Ronald Reagan. And this time, it predicts a Hillary Clinton victory.
Business Owners Can Win, Too — Business owners who are able to tune out the noise and focus on growing their business are winners, too.
Because as we’ll discuss soon in another edition of Living Wealthy Weekly, there are serious economic issues on the horizon that won’t go away, no matter who is President.
They involve fixed interest rates, cheap money, mass stock buybacks and more seemingly mundane data points — that actually point to a huge opportunity for wise business owners.
In fact, many of the world’s largest companies are already taking advantage. So stay tuned, and we’ll tell you more soon.
What To Do Next
Here’s a 3-step action plan to implement before election day:
- If you live in the United States, the election is this Tuesday. Consider casting a ballot for your preferred candidates and local ballot measures.
- Remember not to lose focus on your business. You are your greatest wealth-creator, and the next President isn’t going to change that.
- If you live in any state besides Arizona, don’t forget to set your clocks back this weekend.
That’s it for this week.
Build the life you love,
The Builders at Wealth Factory
What is Living Wealthy Weekly?
Each week we share timely trends, news stories, and current events that affect your life. We help you see the impact, personally and socially, and give you possible solutions to avoid any negative effects. We also give you additional links and resources if you want to investigate further. The purpose is not to be the last word on any topic. Rather it’s to help us all stay informed of what’s going on in the world without letting those events negatively impact your lifestyle. Our goal is to help us all live richer, fuller lives from a position of financial strength. This allows you to weather economic hard times, and seize whatever new opportunities arise in our changing world.
