Relax a bit about politics-related stock market swings

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In the hours after the president is elected, equity investors need to brace for volatility. What they shouldn’t do is panic.

That’s because regardless of how prices react on Nov. 9, next-day moves in the S&P 500 Index are useless in telling what comes after. While the index swings an average 1.5 percent the day after the vote, gains or losses over the first 24 hours predict the market’s direction 12 months later less than half the time.

This matters because the compulsion to act in the vote’s aftermath is often very strong — stocks swing twice as violently as normal those days, data compiled by Bloomberg show. They plummeted 5 percent just after Barack Obama beat John McCain in 2008. But while nothing says Wednesday’s reaction won’t be a harbinger for the year, nothing says it will, either, and investors should think before doing anything rash. Read more…

More about Business, Election 2016, Stock Market, and Stocks
Source: Mashable

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kellhub
Kelly is a shy and lifestyle blogger addicted to new things, a die hard ManUtd fan, loves music and a good dancer but also a terrible singer .......winks.........

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