The stock market is nervous in the month before the American presidential election. In less than three trading days the VIX rose from under 12 to over 20 at the start of September. This was presumably related to insecurity in connection with the FED’s interest rate decision in September but the rise would probably not have been so extreme if there had not been a looming presidential election.
Are there greater risks connected with being an investor in stock now than under normal circumstances? This is not the view of chief strategist David Bakkegaard Karsbøl. Elections are held regularly in the USA, Europe and Japan. There are also referendums, wars and acts of terror. But the long-sighted investor should focus exclusively on the price of investment stock.
Although stocks are currently priced relatively high, in reality there are few useful alternatives for securing even an average return on investment. The risk involved in long-term bonds simply does not match their returns at held-to-maturity. Also, the price of corporate bonds is not very attractive.
Read the Monthly economic report here
You can also see the monthly video interview with David Bakkegaard Karsbøl with these headlines:
00:05 - Hillery or Trump - what is the difference
01:27 - Energy prices will increase the inflation rate
02:37 - Equity markets not more unstable than always