How To Play U.S Election-Fueled Stock Market Crash

Volatility in the stock market has been increasing gradually ahead of the hotly contested U.S presidential election. With front runner Joe Biden’s lead in the polls narrowing, there is growing concerns that a market crash could occur should the election result in an uncertain outcome.

Stock Market Crash Concerns

Market participants are already warning that an uncertain election outcome could result in violent positioning, as was the case in 2016. The Betting markets are pricing a Donald Trump win at 36% with Joe Biden well ahead with a 64% chance.

Should President Trump win the elections against the current polls, the likelihood of major price swings coming into play in the stock market is high. Some of the assets susceptible to violent swings include Invesco Solar ETF that has gained 24% in anticipation of a Biden win. Clean energy stocks have been on a roll, having received a boost on Biden’s clean energy policies.

The options markets already hint that the ETF market could experience swings of as much as 11% in either direction once the results are out. An unexpected Donald Trump win could also result in some currencies coming under pressure, with Mexico Peso and Russian Ruble the most susceptible.

Given the increased risk of the expected swings in the aftermath of the elections, staying away of the market and avoiding risky bets should help protect one’s portfolio from unexpected losses. Staying away from the market would be an ideal way of conserving capital.

Election Opportunity

A significant drop in stock values should provide tremendous opportunities to load up on quality investments once the election dust settles down. Conversely, a stock market crash would present investment opportunities for investors with capital well protected.

It is important to note that any stock market crash in the aftermath of the election would most likely be short-lived, as was the case in the first half of the year. The stock market crashed as COVID-19 fears rattle investor’s sentiments. The market later on bottomed out and rallied to record highs. Likewise, in the aftermath of Donald Trump unexpected win in 2016, the stock market tanked 5% in pre-market before bouncing and railing by over 1%.

By reading our website you agree to the terms of our disclaimer, which are subject to change at any time. Owners and affiliates are not registered or licensed in any jurisdiction whatsoever to provide financial advice or anything of an advisory nature. Always do your own research and/or consult with an investment professional before investing. Low priced stocks are speculative and carry a high degree of risk, so only invest what you can afford to lose. By using our service you agree not to hold us, our editor’s, owners, or staff liable for any damages, financial or otherwise, that may occur due to any action you may take based on the information contained within our newsletters, website, twitter, Facebook or chat. We do not advise any reader to take any specific action. Our releases are for informational and educational purposes only. Never invest purely based on our articles. Gains mentioned on our website, twitter, Facebook, and on our website may be based on EOD or intraday data. We may be compensated for the production, release, and awareness of this article. We will disclose any and all compensation on the article page. This publication and its owner never hold positions in the securities mentioned in our articles. Our information may contain Forward-Looking Statements, which are not guaranteed to materialize due to a variety of factors. We do not guarantee the timeliness, accuracy, or completeness of the information on our site. The information in our disclaimers is subject to change at any time without notice. We are not held liable or responsible for the information in press releases issued by the companies discussed in these write-ups. Please do your own due diligence