How should investors respond on the eve of the U.S. election "results"?
For investors, risk management and asset allocation are particularly important.As the U.S. presidential election officially begins voting, market tension has reached a critical point. History has repeatedly shown that changes in policy direction often become a watershed moment for market trends. In the face of election results, investors find it difficult to accurately assess who will win, and how to adjust market strategies and respond to potential risks has become one of the most important topics at present.
The Market Shows High Uncertainty
Recent data indicates that the competition between the two candidates is exceptionally tight, and the market has exhibited unprecedented uncertainty. The expectation of Trump's election once triggered the "Trump trade," but as the election approaches, this trade has gradually receded, leading investors to take profits, which caused a decline in the U.S. stock market and the dollar, especially for assets related to Trump's policies and opinion polls, resulting in cautious market liquidity. Data shows that October 2023 was one of the months with the lowest volatility in the U.S. stock market during the election year, reflecting a generally wait-and-see attitude among investors before the election.
Historical Experience and Market Volatility
Looking back at the 2016 election, Trump's unexpected victory caught global markets off guard, leading to a sharp decline in stock prices, highlighting the market's high sensitivity to policy uncertainty. In 2020, when Biden was elected, although the initial market reaction was positive, driven by progress in COVID-19 vaccine development and expectations of Biden's economic policies, subsequent market volatility also reflected short-term instability. These historical experiences remind us that regardless of the election outcome, the market may experience significant fluctuations, and investors need to respond cautiously.
USDCNY Trend During Trump's First Election
Currently, the world is holding its breath for the upcoming election results, and anxiety may further exacerbate market volatility. If the election results are surprising or delayed by several days, the possibility of another sharp market adjustment cannot be ruled out. The rise of the Chicago Board Options Exchange Volatility Index (VIX) also indicates that the market is panicking over uncertainty.
Control Positions, Cash is King
For investors, risk management and asset allocation are particularly important. In the short term, controlling positions, setting stop-loss strategies, or simply choosing cash as king are effective means of controlling risk.
Especially for stocks and cryptocurrencies, these growth-potential assets tend to be highly volatile in times of high market uncertainty. In the face of an unclear market situation, blind operations will undoubtedly greatly increase investment risks.
For ordinary investors, there is no need to take risks betting on who will win; cash is the optimal choice. It is also worth considering focusing on more stable products, seeking certainty amid uncertainty. For example, 4E Wealth Management offers financial products with an annual yield of up to 5.5% in USDT, allowing for flexible combinations of demand and fixed-term deposits, ensuring that funds are not idle while waiting for market changes.
Of course, diversified asset allocation helps to resist the volatility risk of a single market, especially by choosing high-quality value assets as long-term investment targets, which can provide a certain margin of safety in times of high market uncertainty. As an official partner of the Argentine national team, 4E supports various asset classes including cryptocurrencies, traditional stocks, indices, foreign exchange, and gold, offering one-stop trading in U.S. dollars and providing more stable growth opportunities.
The election results are expected to be basically confirmed by tomorrow noon. Regardless of the election outcome, the market will ultimately seek a new balance. Stay calm, prepare mentally, and do not be swayed by short-term market fluctuations; view market changes with a long-term investment perspective.
