United States elections 2016 and Your Portfolio

Dear PGM Capital Blog readers,

The 2016 United States elections will be held (for the most part) on Tuesday, November 8, 2016, in which the President of the United States and Vice President will be elected.

The United States presidential election of 2016 will be the 58th quadrennial U.S. presidential election.

On the election day, the voters will cast votes for electors who will then form a electoral college which will then cast votes to select the next president of United States.

Currently, there are 538 electors, corresponding to the 435 Representatives and 100 Senators, plus the three additional electors from the District of Columbia.

With 538 Electors in the Electoral College, a Presidential Candidate needs 270 electoral votes to secure a majority, so whoever gets the most electoral votes wins the presidential election.

The number of electors from a particular state depends on its population size.

Below USA Election Map illustrates the voting power of each state during the 2016 election cycle.

In additional to the election of the next USA president en vice president the following elections will also be held on coming Tuesday, November 8:

  • All 435 voting-member seats in the United States House of Representatives (as well as all 6 non-voting delegate seats).
  • 34 of the 100 seats in the United States Senate.
  • Governorships of twelve of the fifty U.S.A. states and two U.S. territories.

Although there are several presidential candidates competing on November 8th for who’ll become the 45th president of the United States of America, the race will be mainly between the nominees of the two biggest parties and as can be seen here below:



Former US Secretary of State Hillary Clinton (New York)
Presidential Nominee

US Senator Tim Kaine (Virginia)
Vice Presidential Nominee

Hillary Clinton was officially nominated on July 26 at the Democratic Convention.



Businessman Donald J. Trump (New York)
Presidential Nominee

Governor Mike Pence (Indiana)
Vice Presidential Nominee

Donald J. Trump officially accepted the Republican party’s nomination on July 22.

All presidential elections are not created equal. Some are important; some, considerably less so.

Once in a lifetime the fate of the nation rides on an election outcome for example:

  • Abraham Lincoln’s election in 1860 saved the Union.
  • Franklin Delano Roosevelt’s election in 1932 kept the USA afloat during the economic ravages of the 1930s.

The 2016 USA presidential election confronts the country’s electorate with political choices more fundamental than any since 1964 and possibly since 1932.

A victorious Republican candidate would take office backed by a Republican-controlled Congress, possibly with heightened majorities and with the means to deliver on campaign promises.

On the other hand, the coattails of a successful Democratic candidate might bring more Democrats to Congress, but that president would almost certainly have to work with a Republican House and, quite possibly, a still Republican Senate.

The above implicate that political wars between the two mayor parties would continue in the future, and this in a time that the country’s national debt – 4 days before election day – is at an all time high of almost 20 Trillion USD Dollars as can be seen from below image.

On Friday, November 4th, – as can be seen from below 3-month chart – the S&P 500 declined 3.48 points, or 0.17%, to 2,085.18, putting its nine-day decline at roughly 3%.  The last time the S&P 500 index fell for nine days in a row was the period ending December 11, 1980, when it lost 9.4%.

As can can be seen from below 3-month chart, the CBOE Volatility Index, or VIX, has surged in the past nine trading sessions—its longest-ever stretch of gains—and has risen above its 10-year average.

The “fear gauge” is based on S&P 500 options prices. Investors who buy VIX futures contracts are making a bet that stock-price volatility will go up in the next 30 days.

The election has unnerved many investors, causing them to either sit on the sidelines or move to products they perceive as less risky, such as gold or shorter-duration bonds, as polls have tightened between the candidates.

On the other-hand, the price of gold – the ultimate safe-haven – has gained more than 3% over the past nine trading sessions, rising 0.1% Friday to US$1,304.10 an ounce as can be seen from below chart.

With just 4 days to go before the upcoming election, many are wondering how the outcome – particularly the presidential election – will affect their investments.

Markets generally do not like uncertainty. With that in mind, presidential elections, by their very nature, create uncertainty.

How will a Clinton or Trump presidency impact my investment portfolio?
Markets have historically been more volatile in election season. In fact, volatility was more significant during an election season at the end of a two-term presidential era.

Just when it looked like Hillary Clinton was going to make it through election date without a nasty surprise, the FBI chief James Comey announced a new inquiry into her use of her private email server  — and suddenly her healthy lead in the polls began to tighten both nationally and in some key battleground states and subsequent  investors are beginning to re-think their certainty of her victory on November 8th.

The news that the FBI has reopened its investigation into Hillary Clinton’s use of a private server to send, receive and store government emails has handed Donald Trump an unexpected boost ahead of next Tuesday.

Results of a poll held on Saturday, November 5, shows how the numbers are tightening as we approach election day amid crises affecting both Democratic contender Hillary Clinton and her Republican rival Donald Trump.

In below interview with Yahoo Finance, legendary Investor “Jim Rodgers” gives his opinion on a presidency of both Mrs Clinton and Mr. Trump.

Based on his predictions, he warned investors for hard times ahead and said that he is Short US equities, particularly the large names and that he is bullish on the agriculture sector and Long; China, and some emerging markets like Russia, Kazakhstan, Nigeria and Rwanda.

Last but not least, before following any investing advice, always consider your investment horizon, risk tolerance and financial situation and be aware that markets can remain longer irrational than that you can remain solvent.

Until next week.

Yours sincerely,

Suriname Times foto

Eric Panneflek

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