The opportunity to cast votes in the 2024 US presidential election is over. However, it may take time before the results are officially known, according to OCBC.
The 2024 US presidential election took place on November 5 with Donald Trump and Kamala Harris expected to be the frontrunners. Nearly 187 million Americans are eligible to vote for the 47th President of the United States with 53 million having cast their ballots early. While the election is over, it is uncertain when the results will be concluded.
«There is a risk that the outcome of the Presidential election may not be known so soon. In 2020, it took four days before major new agencies projected Biden as the winner,» said Vasu Menon, managing director, investment strategy, OCBC. «Given that this year’s Presidential election is a very close call, especially in the swing states, projections may take longer.»
Delay Risks
In addition to the time required to count votes, Menon also highlighted other risks such as the possibility of a recount or a court challenge.
«The risk of a recount, as we saw in the 2000 Presidential election between Al Gore and George Bush, also cannot be ruled out. This is especially so if the vote tallies in some swing states show only a marginal difference between the candidates,» he explained. «There is also a risk that if Trump loses, he may challenge the results in court, which may delay the outcome.»
Fundamentals and Liquidity
Regardless of who is the winner, Menon advised against investing in the long-term based on political expectations, underlining fundamentals and liquidity as the market drivers that really matter.
«So, if we have a soft landing in the US economy and earnings continue to deliver, global stock markets should have more upside in the medium term, supported by lots of liquidity on the sidelines looking for bargain-hunting opportunities on pullbacks. But don’t expect markets to move up in a straight line. Brace for greater volatility in the coming months,» Menon said.
«In a nutshell, stay invested, keep a diversified portfolio to hedge against uncertainties and geopolitical risks, and time-diversify your portfolio by dollar cost averaging over the coming months.»
