As of this writing, one Senate seat has been won by a Democrat, and another seat has a strong chance of turning blue as well. This means the Senate, Congress, and the White House could all be Democratic.
I’m not as worried about this as I was previously. The Republicans have acted pretty disgracefully, especially these last few months. Removing them as an obstruction means that things can get done, and sidesteps a lot of drama. I don’t think that’s a bad thing.
While the market fears more taxes, its unlikely to be on the cards for the next couple of years. The economy is still reeling, and they know that raising taxes would stop the recovery in its tracks. From Bill Clinton to Obama, Democrats are actually better stewards of the economy. I’ve read Biden’s tax plan, it isn’t that drastic anyway.
Big tech companies like Amazon, Google, and Facebook would likely face more regulation though. But Republicans were against big tech as well, perhaps even more so. It’s hard to tell which way this will go. When in doubt, just hold tight methinks. Of all of the FAANG, I think Facebook is the most toxic, and I would stay away from that.
The market would likely do what it does and overreact, but I expect that investors would get used to it and start asking themselves how to re-allocate their money. Most won’t start pulling out. Tailwinds like low interest rates, high savings, and more stimulus are likely to remain intact.
While I had mentioned I wanted to sell some holdings earlier, I could not bear to part with any of them. It’s a shame I won’t be able to scoop up many bargains, but its a gamble to time the market anyway. I might stretch my margin though.
So keep invested, and perhaps its a good time pick up some stocks that you were eyeing, if you have the cash.