Election, pandemic uncertainty: How worried should NJ investors be?

America is about to pick a president, the COVID-pandemic is accelerating and the price of oil has been unsteady of late.

As a result, the financial markets have been volatile, with the Dow Jones Industrial Average taking a big hit last week. But the situation may not really be as dire as it appears.

Ken Kamen, president of Mercadien Asset Management, pointed out that markets don’t like uncertainty, so investors should not panic.

“They have to have the ability to look through the current market because we will get a resolution of the election and the COVID thing is something we’re all going to have to be dealing with for quite a while,” he said.

Kamen said when you look at presidential elections in the past, “you realize that the markets don’t really much care which party is in the White House. The market has steadily climbed up for the last 100 years regardless of who has been in the White House.”

He pointed out for this election we may not know who the winner is for days, weeks or possibly even months, so “we could get a period of real volatility in the markets as the headlines cover the race from the ever-changing landscape on a daily basis.”

He said even with concerns about election uncertainly, “the market is still trading pretty close to all-time highs so it’s not that things are terrible. Things are probably not going to be as bad as either party would have you want to believe if the other party wins.”

He also noted this past spring we learned the pandemic is not a stock market killer.

“The market treated some companies tremendously well because of COVID. We’ll call those the stay-at-home stocks, and the go-out-to-play stocks have done terribly,” he said. “The market is not looking at COVID as one thing anymore; it’s become much more nuanced.”

Kamen pointed out the price of oil has become less of a factor on Wall Street since the pandemic began because there’s a general acceptance we’re going to be staying home more than usual for the foreseeable future.

He said the dust may not settle for quite a while “but I caution investors to really think about the fact that markets tend to look past who’s in the White House on a historical basis, and recognize they need to be creating portfolios that’ll take them through the long run.”

You can contact reporter David Matthau at David.Matthau@townsquaremedia.com