US Mid-term elections, what do investors need to know?

US Mid-term elections, what do investors need to know?

On Tuesday the 6th November Americans went to the polls to vote. The outcome of the vote turned out in largely the same way it was expected to with the Democrats taking control of the House of Representatives and the Republicans retaining control of the Senate, but does this event have an impact on investors?

What happened in the US, UK and European markets?

From the end of September to the end of October both the US, UK and European markets had been on their way down with things starting to pick up again at the beginning of November. A major event typically causes volatility in markets, and this event was no different. However, whilst there was movement in the markets they seemed to have handled it smoothly. A dip on the day was followed by a rally, leaving markets currently around the same place they were a month ago.

What went down?

Asian markets, most notably China, suffered as speculation that Trumps trade war would be ramped up given that he doesn’t need congressional support to implement it. The US dollar also went down as traders felt confident enough to start looking at riskier options such as developing markets.

What does this show us?

Ultimately, this indicates that there is stability and market sentiment is good which is all positive for investors. There are currently opportunities to be had and investors or those with cash savings should not be afraid to get involved. For those saving regularly over the long-term volatility in the market is a good thing as it enables them to benefit from Dollar-cost averaging and buy into the market at the low points.

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