President Trump coronavirus news: Stay the course and focus on fundamentals

The news that President Donald Trump and First Lady Melania Trump both tested positive for COVID-19 provided another shock to financial markets that were already navigating the uncertainty surrounding the outcome and policy implications of next month’s election. While the news adds to uncertainties, we think the investment implications will remain limited.
Views from Nuveen’s Global Investment Committee
First, and most importantly, we wish both the president and first lady a smooth and rapid recovery. As we have maintained all year, the economic and financial implications of this disease run a distant second to the terrible human cost it has exacted across the world.
It would be irresponsible of us to speculate on the president’s health beyond what little we know, or on what implications it might have for the November election. And while financial markets are rattled today, we do not see signs of panic.
Trading is orderly across fixed income and equity markets, with a moderate flight to safety in light of the news overnight and the disappointing U.S. employment report released this morning. Futures markets today tell us that investors now expect equity market volatility to be even higher over the next several months, but we expected that already given the possibility of a delay in the election results.
Presidential elections do not have a history of being decisive or durable drivers of financial markets. Given that, and especially in light of the additional uncertainty we’re faced with today, we do not suggest investors make significant changes to their asset allocations or overall wealth strategies in advance of or following the November elections.
The key point on this front: Regardless of which party controls the White House or Congress, the main driver of investors’ returns over the long term will be their own asset allocation decisions.
While policy changes following the election could impact the economy and company profits, market activity over the next year seems likelier to be driven by progress toward one or more coronavirus vaccines and their availability to the public at large.
The Federal Reserve also seems likely to renew its dedication to accommodative monetary policy regardless of who wins the presidency. This means investors whose financial goals include generating a reliable cash flow from their assets will remain challenged.
Uncertainty makes for an uncomfortable investing environment. For individual investors, there’s never a bad time to have a conversation with a financial professional about your financial plan and how it’s affected by events like the election and the pandemic.
And for institutional investors, we suggest sticking with long-term asset allocation and rebalancing plans.
If 2020 has provided us with any positive lesson, it’s that staying the course even in the choppiest of waters can often be the right decision.
This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy, sell or hold a security or an investment strategy, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with his or her financial professionals. The views and opinions expressed are for informational and educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions, legal and regulatory developments, additional risks and uncertainties and may not come to pass. This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of market returns, and proposed or expected portfolio composition. Any changes to assumptions that may have been made in preparing this material could have a material impact on the information presented herein by way of example. Past performance is no guarantee of future results. Investing involves risk; principal loss is possible. All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.
 
A word on risk This report is for informational and educational purposes only and is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice or analysis. The analysis contained herein is based on the data available at the time of publication and the opinions of Nuveen Research. The report should not be regarded by the recipients as a substitute for the exercise of their own judgment. All investments carry a certain degree of risk, including possible loss of principal, and there is no assurance that an investment will provide positive performance over any period of time. It is important to review investment objectives, risk tolerance, tax liability and liquidity needs before choosing an investment style or manager. The investment advisory services, strategies and expertise of TIAA Investments, a division of Nuveen, are provided by Teachers Advisors, LLC and TIAA-CREF Investment Management, LLC. Nuveen provides investment advisory solutions through its investment specialists.
 
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