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Investing 2020 Election Year???

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Does anyone have any interesting investment plans for the 2020 election year?

I fully expect a trade deal with China will get completed before the election (the timing of that deal likely won't be a coincidence).  I've read predictions that a China trade deal could lead to a 5-8% stock market run-up followed by a period uncertainty.  

I've talked to a few people that follow the "sell in may and go away" addage.  I've never done it before, but they almost have me talked into it for 2020.  Almost.

At some point in 2020, I'll move 5-10% of my portfolio into gold & silver.  Other than that, I'm undecided if I'll make any changes or not :dunno:

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Not much, looking at suppliers for space launches, and military aerospace, specifically the unmanned wing man stuff. There's been some advancements in the military AI programming for unmanned aircraft. I'm just an aerospace nerd. I'm switching to a broker that invests quite well, and gonna forget about it. And he researches my recommendations and mostly agrees and buys in. He doesn't know much about space and military and aerospace stuff. edit: I need more silver... I just like to have it around.

Edited by ReconRat

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Asking about changing around your asset allocation based on speculation related to politics is pretty much right up there with market timing.  Almost no one can do it reliably and the VAST MAJORITY of investors who try end up realizing lower returns than simply following the broad market.  I'm gonna be 70 next year and don't have a pension income, so my only income is from my investments.  Even so, I'm invested 75:25 equities:bonds with about a 1-year pot of cash to weather market variables.  I basically buy and hold and do a yearly rebalance in the fall and try to offset LTCG with any losses to minimize the tax bite.  I know that's old and boring advice, but it's been proven over the course of many decades to be pretty accurate.  Worst case scenario--in the event of an extended and profound bear market--I could prolly tighten the purse strings and live comfortably, albeit not extravagantly, on the dividend and interest income.  Of course, once I hit the magic 70.5 age, RMDs will keep me pretty happy and well-fed and provide a nice cushion for "alternative" investments....like motorcycles!

Wishing you luck in the market!!!

Edited by Bubba

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Add/FYI:  I don't play any speculative investments like gold, silver, bitcoin, or pork bellies!  I know--really boring old guy...

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On 11/30/2019 at 10:15 AM, Bubba said:

Asking about changing around your asset allocation based on speculation related to politics is pretty much right up there with market timing. 

I don't know that I'd call it market timing.  It doesn't happen every year, but it's a trend that's been recognized for a long time.  I've never done it, but I know someone who's followed it for years (with a few tweaks) with some impressive results.   Also, 5-10% in precious metal is a pretty standard hedge.

https://www.cnbc.com/2019/04/30/sell-in-may-and-go-away-maybe-not-this-year.html

An investor putting $10,000 into the S&P 500 between May 1 and Oct. 31, 1950 to the present would have $4,138, an astonishing loss of $5,862.

An investor putting $10,000 into the S&P 500 from Nov. 1 to April 20 over the same time period would have a gain of $2,836,350.

That is not a typo. We are talking about a gain of $2,836,350, versus a loss of $5,862.

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Yeah, I get it.  I'm aware of the go-away-in-May strategy.  My point was more about your query with regards to making "strategic" changes to your portfolio in anticipation of the 2020 election outcome.  As far as the link above, the other way to look at that data is that IF you had stayed fully invested over the entire period from 1950 to present, you would have a gain of $2,836,350 - $5862 = $2,830,488 for a delta of 0.9979, or 0.0021% difference.  Plus, I'm not a big fan of data harvesting using an arbitrary point in time to mine for results....IMHO.

Not saying you shouldn't go forward with your strategy--just sharing another view.

Edited by Bubba

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Add:  I don't have an issue with some exposure to precious metals, altho 10%--even 5%--is high for my taste.  You hold essentially the same thing with treasury bonds or similar.  Yes, there is the risk of inflationary loss, but you minimize the risk of devaluation and market volatility.  Don't see huge risk of the US govt defaulting any time soon.  Again, not saying it's a bad/dumb strategy....just two ways to get at a similar outcome.

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20 minutes ago, Bubba said:

Yeah, I get it.  I'm aware of the go-away-in-May strategy.  My point was more about your query with regards to making "strategic" changes to your portfolio in anticipation of the 2020 election outcome.  As far as the link above, the other way to look at that data is that IF you had stayed fully invested over the entire period from 1950 to present, you would have a gain of $2,836,350 - $5862 = $2,830,488 for a delta of 0.9979, or 0.0021% difference.  Plus, I'm not a big fan of data harvesting using an arbitrary point in time to mine for results....IMHO.

Not saying you shouldn't go forward with your strategy--just sharing another view.

The only reason I think it's an advantage is you are avoiding a degree of risk by limiting your exposure during the cycle when gains are less likely.  If there is an correction or overall market drop you can go back in during a low point and come out ahead.  The converse is also true and you could miss out on market gains, but historically there seems to be less chance of that.  There seems to be many flavors of that strategy :dunno:

Buy and hold is another fine strategy.  That's what I've done for years.

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