US Election Strategy

Discussion in 'Stocks & Derivatives' started by FullMetalFever, Nov 2, 2016.

  1. FullMetalFever

    FullMetalFever New Member

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    Just wondering what people's strategy is for their stock holdings in relation to the upcoming US election?

    I've heard that the market has already priced in a Clinton victory but I think there is chance (IMO about 25%) that Trump wins and throws the market into turmoil - Brexit style.

    So what is your strategy?

    1. No change. Keep current holdings and continue trading as usual.
    2. Sell some/all holdings before the election and buy back at either same (Clinton) or lower (Trump) price after the election. (possible impacts to CGT)
    3. Shift holdings into something that doesn't have too much downside if Clinton wins and a potential upside if Trump wins - GOLD stocks?
    4. Others????

    Personally, I am thinking of a combination of 2 & 3.
     
  2. GoldenEye

    GoldenEye Well-Known Member Silver Stacker

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    Holding off buying shares until after election. Also, put a bet on a Trump win due to perceived good odds.
     
  3. finicky

    finicky Well-Known Member Silver Stacker

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    What was the wash-up from Brexit? Nothing for the asx.

    Not a trader of shares. I hope for a bit of cushioning from a crash by holding:

    - enough cash so as not to be forced to sell for a couple of years. Also buy a few shares at much lower prices.
    - some bullion
    - some 'quality' gold shares

    There are some who will be using cfds or puts or bear funds/etfs, but too complicated for me. Even finding records to calculate cgt liability is a chore I would not undertake just because of a US presidential election.
     
  4. BuggedOut

    BuggedOut Well-Known Member Silver Stacker

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    I'm working on this right now. My strategy previously was to hold gold mining shares on the expectation that a Trump victory would give a massive boost Brexit style as I agree that a Clinton victory is priced in.

    But the sharemarket wobbles and current sentiment suggests the sharemarket could dive if Trump wins. Even if gold commodity does well, doesn't mean the miners won't sell off. So, yeh I am tempted to just exit and back Trump at odds for value for exposure to the upset result. Or maybe jump into Gold ETF as a pure commodity play (it won't suffer from a broad sharemarket sell off)

    Bit hard to know the best play here and I'll probably change my mind tomorrow :p
     
  5. BuggedOut

    BuggedOut Well-Known Member Silver Stacker

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    Gold miners on the ASX boomed big time when the Brexit result was coming in. If I could be bothered I'd find the thread on SS, but I did make a few dollars that day! :D
     
  6. Old Codger

    Old Codger Active Member Silver Stacker

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  7. finicky

    finicky Well-Known Member Silver Stacker

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    I did say "the wash-up" for the asx

    I remember the disappointment when goldstocks followed everything else down in the GFC.

    ASX gold stks index (XGD) Click to Check out 2008
    [imgz=http://forums.silverstackers.com/uploads/1893_big_46.gif][​IMG][/imgz]
     
  8. FullMetalFever

    FullMetalFever New Member

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    Thanks for all responses so far ..... interesting to find out what others are thinking.

    I'm still very much in two minds as I worry that if I sell any of my current stocks, that is the point at which they will start to "run".
     
  9. BuggedOut

    BuggedOut Well-Known Member Silver Stacker

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    Sounds like you might be suffering FOMO (Fear Of Missing Out)

    Just keep in mind that fear (and any emotion for that matter) is NOT a helpful thing when making investment decisions.

    Good luck whatever you decide.
     
  10. FullMetalFever

    FullMetalFever New Member

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    I think my FOLD (Fear Of Losing Dollars) from a correction is currently stronger than my FOMO of a sudden rise from sitting on the sidelines for a week or so.

    Either way, you are correct and those emotions are not at all helpful to making investment decisions.
     
  11. SilverDJ

    SilverDJ Well-Known Member

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    I'm not selling anything, but haven't been buying shares or metal in a while to save up cash and wait and see what happens.
     
  12. SilverDJ

    SilverDJ Well-Known Member

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    You don't actually lose dollars until you sell.
     
  13. southerncross

    southerncross Well-Known Member Silver Stacker

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    All in your mind
    I've been thinking about this for a while, Just going to ride it and have some powder dry for opportunity's.

    Nearly sold everything before brexit as I was expecting a no vote based on my own research, but didn't due to nagging by the missus at the time telling me I was being stupid thinking I could buy back in lower and what if it went the other way.

    I guess tho, it depends on what type of stocks you hold.

    F.O.L.D cure is a wary stop loss setting,
     
  14. SilverSanchez

    SilverSanchez Active Member

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    Their called stock HOLDings not stock selling :)
     
  15. JulieW

    JulieW Well-Known Member Silver Stacker

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    If Jim Rickards matters to you, here's his latest perspectives.
    He says Clinton is priced in and if it's Trump then gold will leap $100 at least. So buy gold is the best option.

    [youtube]http://www.youtube.com/watch?v=OWnVgumM5lQ[/youtube]
     
  16. Peter

    Peter Well-Known Member

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    Worth watching the lot.
     
  17. JulieW

    JulieW Well-Known Member Silver Stacker

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  18. BuggedOut

    BuggedOut Well-Known Member Silver Stacker

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    I've settled on my strategy for the election week coming.

    My underlying assessment is that :-

    * If Trump wins then gold goes up, stocks down.
    * If Clinton wins then gold goes down, stocks up.

    I did agree with Rickards last week to some extent that there was a bit of an asymmetrical trade setup - that being the markets had already priced in a Clinton victory, but with the surge in Trump support over the last week we have seen gold moving up with that support and so I don't know if it's quite so asymmetrical at the moment and gold is at a key level right now (meaning it could easily make a big move in either direction).

    Add the fact that if Trump wins and there is a stockmarket sell-off then that sell-off might hold back the gold stocks a bit too (despite the higher gold price) so maybe there is not as much upside there. Many would remember that when the GFC hit, gold stocks didn't fare as well as they probably should have.

    I do think that the markets are overstating the favoritism of Clinton and Trump has a better chance than mainstream polling suggests (and betting markets are based on), though I am also wary of the possibility of "voting irregularities" bucking that and helping Clinton get over the line.

    So I've sold out my gold shares for now at a decent price and am using the betting markets on the election directly to setup my new position for the week. There are some markets being offered now regarding the Electoral College Votes which are used to decide the president (270 required to win). Specifically there are HANDICAP markets that I think are offering great value to take Trump with PLUS Electoral College Votes.

    This covers me for a Trump win (to compensate me for missing out on potential gold upside) but also covers me for a close Clinton victory without risking serious downside on the gold shares. If Clinton wins in a landslide then I will lose my bets, but probably not losing more than I would have by holding my gold shares (I'd expect gold to dive back down to at least the $1250 USD level if she wins and that's probably worth 10% on most gold stocks) and this way my losses are limited by the size of my betting stakes.

    Good luck to everyone trying to set up their own positions.
     
  19. BuggedOut

    BuggedOut Well-Known Member Silver Stacker

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    I should add that I'll be hovering over the BUY button on Wednesday morning and will have a couple of stocks in my sights depending on how the election results are panning out.

    I'm not putting ASX codes up here now though because I like to make sure I can get on before giving out tips :p
     
  20. SilverDJ

    SilverDJ Well-Known Member

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    I don't recall from previous US elections, but what if it's really close as it's now expected to be?
    Can the result drag on for days or weeks?
     

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