Investors urged to de-risk ahead of US elections due to economic slowdown and geopolitical tensions.

From Investing.com: 2024-09-21 05:30:00

As the 2024 elections loom, BCA Research warns investors to de-risk portfolios due to economic slowdown and geopolitical tensions. Analysts predict a recession, with rising unemployment triggering market selloffs as early as September/October. The focus is on favoring US assets, bonds over stocks, and defensive equity sectors amid the uncertainty.

Geopolitical instability adds to market concerns, with tensions with Russia and China posing risks. Russia’s potential economic retaliation and China’s structural issues could disrupt global markets. Analysts warn of potential “October surprises,” like increased unemployment or geopolitical events, impacting voter sentiment and market volatility. Investors should anticipate and react to these risks.

BCA projects a 55% chance of Democrats winning in 2024, but a Republican sweep would bring major changes. A Democratic victory could lead to gridlock and nuclear brinksmanship. Regardless of the outcome, investors should brace for market fluctuations. With both parties neck and neck, preparing for unexpected disruptions, whether economic or political, is crucial to managing risks.



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