With just over two weeks until the 2024 presidential election, the contest between Vice President Kamala Harris and former President Donald Trump remains tightly contested. Wall Street investors, including billionaire Stan Druckenmiller, have expressed confidence in Trump's chances of winning, which he says are reflected in stock market trends. Meanwhile, former President Barack Obama and Michelle Obama are set to join Harris on the campaign trail in the final weeks, aiming to boost her support.

This leads us to the question I have been asked a lot lately by family, friends, and clients;

Polymarket Odds

The chart above is from Polymarket, a prediction market platform that allows users to bet on the outcomes of various events. The odds shown above are based on over $2 Billion Dollars of bets placed on who will be the next President. However, due to U.S. regulatory issues with gambling and prediction markets, U.S. residents are generally restricted from betting on Polymarket. Therefore, these bets come from people outside the U.S., so take the odds with a grain of salt. (You can click on the image to see the live updates).

Kalshi Odds

Kalshi is similar to Polymarket, except U.S. citizens can legally bet on this platform. It is a federally regulated events predictions exchange. Kalshi operates under the oversight of the Commodity Futures Trading Commission (CFTC), which regulates derivatives markets in the U.S. The caveat with Kalshi however is that it is a much smaller platform than Polymarket. As of the time I am writing this, there have only been $34 Million Dollars of bets placed on Kalshi for the Presidential Election - less than 2% of the amount placed on Polymarket. (You can click on the image to see the live updates).

The Stock Market

The two betting markets shown above are both favoring former President Trump. However, if you look at the polls it appears to be a much tighter race, with Vice President Harris slightly ahead.

So if VP Harris becomes President what will happen to the stock market? The most recent evidence we have to look at is how the stock market (S&P 500) has performed under the Biden Administration. As you can see below, 3 out of 4 years have been pretty strong, but many investors are still scarred from that nasty bear market in 2022.

What if Trump wins? Oddly enough, the four-year performance of the stock market under the Trump Administration looks very similar to Biden’s. 3 out of 4 years were strong, with a decline in year 2.

Now what if we go back 80 years? Has it made a difference whether the President was a Democrat or a Republican? Not really. There have been ups and downs. At times some BIG ups and downs. But over the long haul, regardless of who was in office, the stock market has gone up.

Stick To Your Plan

So what will happen to the stock market if ______ becomes President? I have no idea, but history suggests it doesn’t make much of a difference. Regardless of who wins, my investment strategy will remain the same; I own a variety of short-term treasuries and investment-grade bonds for my emergency fund. For my longer-term investments, I primarily invest in Leverage Financial Advisory’s top-ranked low-cost index funds and a diversified portfolio of stocks from companies demonstrating above-average revenue and profit growth with strong price appreciation. That’s my plan, it works for me, and if ______ becomes President, I’m sticking to it.

Have a great week ahead!

Brian Bond, CMT