Don't Expect Investor Angst To Magically Disappear After The Election

Uncertainties related to the U.S. presidential election have led to investor angst and the turbulence in the stock market reflects this.

While this situation will pass, “elevated investor angst is unlikely to magically evaporate completely after November 8, 2016,” BMO Capital Markets’ Brian G. Belski commented in a report.

Elevated Investor Angst

Belski noted that investor angst was driven by “fear and emotion,” rather than by process or fundamentals. He pointed out that odds and polls didn't represent actuality, and that investors were giving the polls and surveys “way too much credit.”

While investors would need to allow actualities and certainties to develop, one thing needs to be accepted: the level of investor angst regarding the election may not dissipate on November 8.

“As such, it makes no sense from a portfolio strategy perspective to employ major shifts in positioning prior to seeing the actual results. In fact, our current US sector positioning is exhibiting one of our most neutral stances that we have ever produced in our over 18 years as a lead strategist,” Belski wrote.

The SPDR S&P 500 ETF Trust (NYSE: SPY) is down 2 percent since October 10.