With the highest voter turnout and an extremely tight race, the 2020 presidential election was unlike any other! On this week’s episode, Josh and Austin do a quick recap of the election and discuss how this election affects the stock market. They also dive into some quick pandemic updates, including reasoning for why COVID-19 has more of an impact on the market than the actual election does. Listen in now!
Main Talking Points
[1:09] – Election Day
[4:07] – Looking Ahead & the Market
[8:46] – COVID Update
[10:49] – Dad Joke of the Week
[11:20] – Reacting to the Election & Investing
[14:40] – Next Steps
[19:13] – Did Josh & Austin vote?!
Links & Resources
Invest With Us – The Invested Dads
Free Guide: 8 Timeless Principles of Investing
Social Media
Full Transcript
Intro:
Welcome to the Invested Dads Podcast, simplifying financial topics so that you can take action and make your financial situation better. Helping you to understand the current world of financial planning and investments, here are your hosts, Josh Robb and Austin Wilson.
Austin Wilson:
All right. Hey, hey, hey. Welcome back to the Invested Dads Podcast, a podcast where we take you on a journey to better your financial future. Josh, it’s been a weird lead up, but I think it’s time to actually talk about something that everyone’s going to want to talk about, Christmas.
Josh Robb:
Yes, that’s right, the next best holiday. Oh, wait, Thanksgiving’s coming up.
Austin Wilson:
Oh, shoot.
Josh Robb:
Everybody always forgets about that. My wife gets so mad, it’s her favorite holiday and everybody skips over it. No, we’re actually going to talk about something that already happened and that’s the election.
Austin Wilson:
The election, it did happen in that.
Josh Robb:
We were planning on doing it the Monday after. Tuesday was election, Wednesday we’re going to have it, and then Thursday, we’re going to publish it and…
[1:09] – Election Day
Austin Wilson:
Too many balls in the air, I think. And a couple of those have settled since then. Not everything, but we’ll get there. So I guess, yeah. So on the 3rd of November was election day and everyone went out and voted and a lot of people voted beforehand and a lot of people voted it by mail or absentee or whatever they did. A lot of people voted.
Josh Robb:
Which is great.
Austin Wilson:
Yeah. Record turnouts pretty much on every front, right?
Josh Robb:
Yes. Yeah. And honestly, that’s what you want to see is you want more people to vote because historically speaking, you do not see a large turnout for elections compared to the number of potential voters that are out there in the US. So it was good to see there was more opportunity for people to vote through the expansion of, there’s mail-in ballots, there was the absentee, the option to drop off ballots, all those different things to make it more accessible, which is a good thing, I think long term.
Austin Wilson:
Yeah. Interesting that all of this happened in the midst of an ongoing health pandemic that we’re all kind of working our way through right now. So that changed some of the means and the ways that people could or should, or felt like they should vote anyway. So yeah, 2020 has been interesting. So that was the election. That was on the third. So Tuesday evening, we all sat down after dinner and turned on the TV and we’re kind of watching states and counts start coming in. And pretty much, you start seeing the numbers come in and you just know at that point that you’re probably not going to know a lot.
Josh Robb:
And they were, I think pretty clear ahead of time, there’s just so much unknown. Yeah. There’s enough absentee and mail voting, anything outside of the actual physical, voting to not be able to call too much results.
Austin Wilson:
Yeah. I think that late into the evening on Tuesday night, it was kind of, by election betting consensus, looking like Trump had a really, really, really good shot and even had a decent shot on Wednesday morning. But the more of those later votes got counted in some of the key states, the more it started looking like Vice President Biden would then take the knot there. So some of the key states that were definitely close were Pennsylvania. Trump had a big lead for a while, but then a lot of those later votes got counted for absentee or whatnot. And those were generally speaking for Biden. So that pushed that state blue. Georgia was close. North Carolina became really close. Michigan, Trump had a good lead in and then that became really close and Biden ended up winning that one as well as Arizona and Wisconsin for a couple.
Josh Robb:
North Carolina.
Austin Wilson:
And North Carolina. So yeah, those are some key states that everyone was watching. A lot of the other states kind of went as anticipated, more or less.
Josh Robb:
The one that shocked me was Alaska, is they took forever to call that state.
Austin Wilson:
Yeah, Trump had a very large lead.
Josh Robb:
Yeah. And I just thought, “What are they doing over there? Waiting for the…”
Austin Wilson:
Polar bears to get their votes in?
Josh Robb:
The dog sled bringing the mail votes? I don’t know what’s going on.
Austin Wilson:
What’s that? The Idid-?
Josh Robb:
Iditarod.
Austin Wilson:
Iditarod. I’ve always wanted it to watch a movie about that. I don’t want to go do it.
Josh Robb:
It seems cold.
[4:07] – Looking Ahead & the Market
Austin Wilson:
It seems cold. So yes. So Josh, kind of break down where it looks like. So we’re recording this on the 10th. So we’ve waited a little while to kind of let things flush themselves out and see where we’re at. Where do things look right now?
Josh Robb:
Yes. So as of right now, over the weekend, this last weekend, Vice President Biden officially announced he had won and accepted the win. And so him and Kamala Harris had their victory speeches over the weekend. And so for our presidency, they’ve announced they’ve won based on the count. Now, there are some outstanding lawsuits and some counting, recounting of votes going on right now, but it appears to be even with that, the high probability of going to be the next president and vice president. And then from a house standpoint, so the house, really, from the number of seats that were out there between the Democrats, Republicans, there was really a high probability that the Democrats were going to keep the house. And they ended up doing that. The Democrats kept control of the house, but they did lose some seats. And so there was a little bit of switch there where the Republicans picked up some seats, but not enough to change the majority.
Austin Wilson:
In the Senate.
Josh Robb:
Yep. And then in the Senate, again, based on the number of seats available, it was projected that the Democrats were going to sweep that. There was kind of what they called the blue wave, where they would take control of all three, the president, the Senate, and the house. Well, the Senate, as of right now, it’s still in Republican control. Now, there are two outstanding Senate seats, which is both Georgia.
Austin Wilson:
Correct.
Josh Robb:
Every state gets two senators and both of the senators in Georgia are in a runoff. And so the election results as we speak are, it’s what? 48 to what?
Austin Wilson:
52.
Josh Robb:
52. And so if you count the two Republican seats where they before. So if they lose, the Democrats would be 50/50 with a tie break going to the vice president.
Austin Wilson:
And so yes, it’s actually, yeah. So if the Democrats are able to claim both of those seats in the runoff in January, then they will have a 50/50 tie, but Vice President Kamala Harris would then be the tie breaker. It seems unlikely based on what we’re seeing numbers wise, that Democrats are going to win both. They may win one, but if Republicans only win one, then they get 51, and they’re in the clear and continue to keep the majority. And what does that create?
Josh Robb:
So the big deal now, and part of, we’ll get to this in a minute, is kind of what the reaction was, is because there was not a blue sweep, the Republicans as of right now control the Senate as they did prior. That means there will be gridlock.
Austin Wilson:
Gridlock. Yeah.
Josh Robb:
That’s the big word. Gridlock, meaning that not one party has full control to push through an agenda without any opposition. From a market standpoint, that’s big news.
Austin Wilson:
It is big news.
Josh Robb:
The market’s opinion, gridlock is the best way to govern because it slows things down. It causes compromise and it allows the market really to have less uncertainty of large changes, sweeping changes in certain healthcare, tax reform, those types of things, from one party, either party.
Austin Wilson:
Correct. Yeah, those are the specific two reasons that the market, following the election, it became pretty evident about later in Wednesday, not clear, but pretty evident later on Wednesday that we were going to have a Biden White House with a Republican Senate and a Democratic house. That was pretty evident late Wednesday. And it’s only gotten more evidence since then. And the market after the election was on fire. They liked the fact that you pretty much are going to keep status quo in terms of tax reform and healthcare regulation, are the two things that the market was watching.
So specifically speaking, the vice president, former vice president, President-Elect Biden and Kamala Harris could not work with, they didn’t have enough Congress on their side to push through the tax reform that Biden had proposed, some of the healthcare things that Biden had proposed. And those are things that were risks for wall street. And those risks are a little bit less now. So I think that the week of the election was one of the strongest. It was one of the strongest election weeks ever. And the general market was up six, seven, eight, 9%, depending on what area of the market you’re looking at. So good news there. Definitely, gridlock can be thought of as not really anything can happen. And some people may think that that’s bad, but wall street thinks that’s pretty good.
[8:46] – COVID Update
Josh Robb:
And speaking of market reaction, we might as well mention, Monday the ninth, there was a big pop in the market, especially early on, because there was a drug company, Pfizer, who announced some COVID news in that their vaccine had a high rate of, what’s the word?
Austin Wilson:
Yeah. The effective rate, the effectiveness of their vaccine.
Josh Robb:
The effective rate is over 90%.
Austin Wilson:
Correct.
Josh Robb:
And also there was very little to no adverse side effects. And so that news really moved the market, especially a lot of the more value oriented stocks, energies, airline, those types of things that have been beat down pretty hard because of COVID. Now, we bring that up talking about elections because that had a bigger reaction than anything that happened the prior week with the election.
Austin Wilson:
On a one day basis.
Josh Robb:
On a one day basis.
Austin Wilson:
Correct.
Josh Robb:
And the reason for that is the market is more concerned about COVID than it is election results.
Austin Wilson:
Especially now that they kind of understand that it’s just going to be kind of as is. They were waiting on vaccine news.
Josh Robb:
Yes. And it comes back to what we’ve always said is politics and investing really don’t mix. I mean, there’s a lot of news and headlines about proposals and things like that, but in general, the stock market doesn’t care who’s in office, who controls what. They’ll react and adjust to whatever policies come out. And so this news on something they do care about, which is COVID, which is impacting the economy and has caused a lot of issues, a positive news on that, you see the market react more to that than you do anything else. And so, again, coming back to what we’ve always said is you can have your opinions on politics and you can vote based on what your views and values and beliefs are, but you shouldn’t adjust your holdings and your investment philosophy just based on an election result.
Austin Wilson:
Correct. Yeah. Especially based on, regardless of what year you’re looking at an election, there is potential for choppiness around there, just because the market fears change and there could always be change, but yeah. Looking out, generally speaking, things have been fine. Yeah. Which is a good thing.
Josh Robb:
As a long-term investor.
[10:49] – Dad Joke of the Week
Austin Wilson:
As a long-term investor, patience is key. So Josh, I’m going to give you dad joke of the week right now.
Josh Robb:
I’m ready.
Austin Wilson:
I got a good one for you. So why did dad get rid of all the round plates?
Josh Robb:
I have a guess, and I’m going to guess because he wanted to eat four square meals a day?
Austin Wilson:
It’s because no one was eating a square meal.
Josh Robb:
Oh, man.
Austin Wilson:
So square meals are very important. Eat your vegetables. Eat your fruits. Eat your French fries.
Josh Robb:
Protein.
Austin Wilson:
Hotdogs, pizza, eat them all.
Josh Robb:
Iced tea.
[11:20] – Reacting to the Election & Investing
Austin Wilson:
So, okay. What does this mean, Josh? So suppose I’m investor John Doe, the most generic name they use for all the courses they don’t know who that is in the crime shows. Investor John Doe says, “Oh my goodness, this is the outcome we’re looking like right now. Should I sell my stocks?”
Josh Robb:
Well, yes and no. Depends on what you’re selling for. Do I need some money? Let’s say I’m John Doe in retirement and I need a monthly withdrawal. Then maybe you need to sell a little bit.
Austin Wilson:
Same thing as normal.
Josh Robb:
Yes. But to answer your question is that really depends on where you’re at in your overall financial plan, what you need to have accomplished, and what your goals are. But really the answer is no.
Austin Wilson:
Not out of fear.
Josh Robb:
Just because of an election, you should not sell your stocks. Now let’s flip it.
Austin Wilson:
Flip it. John Doe over here says, “Josh, should I buy some stocks?”
Josh Robb:
Yeah. And again, it comes back to what are your long-term goals? Should you buy stocks just because of the election? No. Again, the election shouldn’t drive it, right? But is now a good time to buy stocks? If you’re a long term investor, it’s always a good time to buy stocks because 30, 40 years from now, the timing of when you bought in is less important from how long you stayed in. The compounding does more than the timing of getting in. And so is now a good time to buy a stock? Yeah. But it’s not as good as it was 10 years ago. So it’s like they say, planting a tree, the best time to plant a tree is 30 years ago. The second best time is now.
Austin Wilson:
Right now.
Josh Robb:
And so that’s what it comes to investing is timing does not matter. Selling or buying should be not based on emotion, but it should be based on the needs in your financial plan. And so really when you talk to clients and if you’re for or against whoever wins, you can have an emotional reaction. And again, based on your values and all that, that’s fine from politics standpoint, but your politics and your vesting, you need to keep two different hats on. You switch back and forth because they don’t mix. They shouldn’t mix. And that’s what we’re reminding our clients is we’re long-term investors. Whoever wins the election, they’re there for years. Then there’s another election. Every two years, there’s people moving in and out of the different branches. So there’s no permanent. When it comes to the election process, it’s investing in companies over the long run. Do you think this company will be here through all the different presidencies? And that’s what we’re investing for.
Austin Wilson:
And it’s key to remember that historically speaking, through Democrats in the White House, through Republicans in the White House, through Democrats or Republicans in both sides of Congress, the US economy has thrived. It has grown, but it’s had tough times also. The stock market has done the same. But over time, the economy has grown, which meant corporate earnings have grown, which meant the stock market has done well over time. Time is the key, as you’ve mentioned multiple times, but it doesn’t really matter historically, who’s been in the White House, because both sides have had favorable long-term returns.
Josh Robb:
Yep. And one of the things we always have to be careful about is the old argument, “Well, this time is different,” because you can say that…
Austin Wilson:
Every time.
Josh Robb:
And it’s true, every election is different, and this time is different than all the last, but that doesn’t mean that the long-term goals have changed. And that’s really what you’re focusing in on. So, yeah. You’re right. Should you buy, or should you sell? That’s a great question. And that’s something you should talk to your financial advisor about based on your needs and your plan, not what happened on Tuesday.
[14:40] – Next Steps
Austin Wilson:
Right. So kind of next steps. Let’s think that way now. So obviously you mentioned it earlier, but in January now, so really, the votes are cast aside from the Senate runoff in Georgia, where both senators, two up for reelection and two current challengers are going to what’s called a runoff because they were too close going into this.
Josh Robb:
So this has nothing to do with the results of the presidential election.
Austin Wilson:
This is the Senate.
Josh Robb:
It’s a state thing where in Georgia, the results were so close, it forces a runoff to try again to make sure they get the end results. So it’s all a result of what was already in Georgia’s election laws is saying, “Okay, if it’s within a certain percent, we do a runoff,” and the runoff happens in January. And so in a sense, it’s, I don’t want to call it a do over, but that’s what it is, is everybody knows now it’s a pretty tight race, so the idea is if I like candidate A, I should make sure I tell everybody, “Hey, you should vote for…” It’s a chance for, again, both candidates to go back on and say-
Austin Wilson:
Yep. Re-campaign.
Josh Robb:
Yeah. Re-campaign and say, “Okay, you saw how close it was. If you think I’m the right one, make sure that you’re motivating, encouraging everybody.” And that’s what you’re going to see a lot of, if you live down in Georgia, you’ll probably see a lot of political ads from now until January.
Austin Wilson:
I would assume that every dollar on both sides of the aisle that has not been spent already is going to be funneled towards Georgia, between now and voting day in January.
Josh Robb:
Because like we said, it’s not just, “Oh, I want to win the Senate seat,” which is part of it. But the thing is if we win the Senate seat, either party, that determines the control. So that’s really what it comes down to is they’ll probably say there’s more at stake than just winning a Senate seat, it’s control of the Senate overall.
Austin Wilson:
Absolutely. So that’s number one thing we’re watching. Number two, obviously it has probably been noticed that President Trump has not yet conceded to the election results, that a lot of outlets have said this is pretty much what’s happening. There are a lot of lawsuits in some key states that were very, very close that I think is going on mostly to make sure that the ballots that were in question, that they’re legal ones, they’re done correctly. Everything’s kind of on top of the table. So I think that that’s what’s going on right now. It appears that it’s probably not going to change the outcome, but everyone should want a legal and fair election.
Josh Robb:
And it’s not unprecedented. There’s been in the past challenges to the election process to make sure it was done correctly. 2000 was a good example with George W. Bush and Al Gore, where they, in Florida, were looking through and redoing that count in some of the key areas down there. That carried through until the Supreme Court made sure that that process is completed. And there is a deadline, there is a timeframe that it has to be done, because again, the votes go in and all the votes determined are the electoral college, the representation from each state. And so there’s a deadline for that for them to go and actually cast their votes for the president. And so there will be an end in sight. It won’t go on forever, but it will be a little unknown for a little while.
But like you said, with everything going on, the key is for the most part, this was a very orderly, like you said, with COVID and everything going on, the election process ran relatively smoothly. And with a record number of early voting and absentee and all that stuff, it shows the ability for our country to adapt to what’s needed to make sure that everybody has the best opportunity to vote.
Austin Wilson:
I think that as Americans, we can say that with that high voter turnout that we all saw, people were very passionate, but I think that democracy took a big win in terms of voter participation. And no matter what side of the aisle you fall in, we can be proud of that, because it’s the American people who have a voice, and it’s an amazing gift that we have. So compared with, like you had mentioned earlier, sometimes our voter turnout’s not that great. Yeah. And it’s kind of scary how low it is sometimes. If you compare that to sometimes, they have less elections, maybe in some other European countries, but when they do have elections…
Josh Robb:
High turnout.
Austin Wilson:
Crazy high turnout. And we’re getting like close to Europe numbers on some of these turnout numbers. So I’m very proud of that. And yeah, no election’s without a tick ups or uncertainties, but hey, you had an election in the middle of a pandemic and I think we’re going to be all right.
[19:13] – Did Josh & Austin vote?!
Josh Robb:
Yep. So I’m going to ask you, Austin, about your vote.
Austin Wilson:
Okay.
Josh Robb:
Was it early? Was it the morning of? The day of? Did you mail in? Did you go vote in person?
Austin Wilson:
I voted two days early in person.
Josh Robb:
Okay. And what was your experience waiting in line?
Austin Wilson:
Yeah, I waited in line. It was a Sunday afternoon. It was Sunday. I waited in line for 30 to 40 minutes in the snow.
Josh Robb:
Oh, that’s right, because they had the weird snow day.
Austin Wilson:
We had a weird snow, a little. It wasn’t snowing, but it was blowing and cold and yeah, I waited 30 or 40 minutes outside of the board of elections. And I was great that there were that many people that are voting early and it went really smoothly and it was good. What about you?
Josh Robb:
I voted the day of, so the Tuesday, where I vote, there’s quite a few machines and very little wait, and the previous elections, and I thought, “Well, based on the number of people that seem to be voting early,” which here in Ohio, they had a pretty good window. I mean, there was what? Four weeks.
Austin Wilson:
Yeah. It was pretty long.
Josh Robb:
It was a decent amount of time that you could go in and vote early. So I thought, “There’s probably not going to be a big line,” and sure enough, I went before work. I was in and out and less than 10 minutes. I joked, the longest it took me was I got stuck behind a bus picking kids up for school on my way to the location. That was what slowed me down more than anything. So it was a very easy process, but it’s like I said, my wife, she voted early. It just schedule-wise worked out for her. And she waited for maybe 10 or 15 minutes before getting in. But in general, it’s nice to have those options and for people to, in my opinion, it really eliminates any excuse of not voting, because there’s not just that one day. You had options.
Austin Wilson:
If you give people quite a few options, your turnout should be high, and it was, and it was a help. So yeah, I think the other wildcard that continues to be in play is COVID and it’s probably actually really good that the election was when it was, and not a month or two later, because COVID cases are not going down. They’re actually increasing at around 100,000 plus per day, which is crazy high here in the United States. I think we had just crossed over 10 million cases. That’s a lot.
Josh Robb:
That’s a lot of cases.
Austin Wilson:
So yeah. I’m glad that we got that behind us now. And there won’t be any risk to the election not happening or whatever, or being postponed. So the election, it’s done. We’ll just have to be patient, but yeah, the uncertainty is lessened at this point.
Josh Robb:
Now I do want to say one last side note on this whole thing, as we’re watching the results and everything, and they’re talking about Joe Biden had the largest number of votes ever. And I said, “Well, that’s great,” but it’s like when we’re watching the Dow. The larger the number gets, as population grows, you would think that’s actually a good thing. We have 300 and some million people here in the US so you would hope over time…
Austin Wilson:
Every election should be bigger.
Josh Robb:
You should set that record every four years. But to me, it was just always funny. When you talk percentages or you talk total number with a growing population, a total number, it’s the same as I say, we had more people watch the super bowl than ever before. Well, that’s because there’s more TVs than ever before. It’s just that number to me is irrelevant, but it was awesome to see in general, the percentage of voters was going up. But every time I saw those, I thought, “Yeah, it’s great. But it’s also kind of a weird thing to say.” Okay, give me percentages. I’m a percentage guy, because then you can compare it.
Austin Wilson:
That’s just probably a good disclaimer for listeners, whether they’re watching the news in terms of finance numbers, stock market numbers, or election, things like that. Percentages are better.
Josh Robb:
Yes. So like we saw earlier, biggest DOW drop ever-
Austin Wilson:
Earlier this year. Yeah.
Josh Robb:
Yeah. But it’s the…
Austin Wilson:
Points versus percent. Yeah.
Josh Robb:
We’ve had worst percentage moves in the past, but from a dollar, it’s irrelevant.
Austin Wilson:
Percentage moves are the great equalizers. So keep that in the back of your mind as a little nugget today. So Josh, what can listeners do to continue to support and help us grow this podcast?
Josh Robb:
Yeah. Like we always say, first and foremost, subscribe to our podcast. That gives you the alert when something new comes out. And then second, if you know somebody was talking about the election, just our short little recap of it, then make sure you share this episode with them. We would love for you to do that. And then also, like and subscribe to wherever you listen to it. Leave a comment. Any kind of review are great for us. It helps us rank a little higher. So that’s always important. And then finally as we release those, all these, every Thursday, if you love a topic for us talk about, send us an email.
Austin Wilson:
We love emails.
Josh Robb:
Yeah. Hello@TheInvestedDads.com. We would love to talk about the topics that you’d love to hear.
Austin Wilson:
All right, well until next Thursday, have a great week.
Josh Robb:
Talk to you later.
Austin Wilson:
Bye.
Outro:
Thank you for listening to the Invested Dads Podcast. This episode has ended, but your journey towards a better financial future, doesn’t have to head over to TheInvestedDads.com to access all the links and resources mentioned in today’s show. If you enjoyed this episode and we had a positive impact on your life, leave us a review, click subscribe, and don’t miss the next episode.
Josh Robb and Austin Wilson work for Hixon Zuercher Capital Management. All opinions expressed by Josh, Austin or any podcast guests are solely their own opinions and do not reflect the opinions of Hixon Zuercher Capital Management. This podcast is for informational purposes only, and should not be relied upon for investment decisions. Clients of Hixon Zuercher Capital Management may maintain positions in the securities discussed in this podcast. There is no guarantee that the statements, opinions, or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principle. There is no assurance that any investment plan or strategy will be successful.
