Markets Don't Care Which Side Wins the Elections.

Confidence in the market can mirror the degree to which an investor agrees with the party dominating office. Mathematically, more people will always view election results bullishly, since electoral winners probably just won their votes. Like Garrison Keillor's Lake Wobegon schoolchildren: They're all above average. Having said that, don't be surprised by how many investors don't care either way, and simply invest. That's why neither party is really any better or worse for market performance. Statistics and politicians -- is there much difference between them? Figures lie, liars figure, and a lot of both will be swept into and out of office after Tuesday. Statistical histories may give this market or that market more upside potential because one party or the other tends to be in or out of control. But it is nothing more than arbitrary coincidence. Historical performances of any two periods aren't likely to be identical at any given time. One direction or degree has to correlate more closely to one party's victories. The first clue of their arbitrary relationship should be that it's often commented how the correlation seems counter-intuitive (e.g. bigger rallies during "anti-business" Democrat leadership). It's not counter-intuitive -- it's irrelevant. Political parties make a good living by exploiting the "confirmation bias" among voters. They stake out positions like a fisherman casts his line off the dock. The fish -- err, voters -- only see the worm they want to see, and not the hook, so they bite. Hard. Investors do that, too. Exit polling and rumors on Tuesday will offer more trading opportunities than the overall actual outcome. Races left unresolved in the wee hours may impact overnight trading in futures. Just more than half the market will be pleased, and less than half will be disappointed. The closest thing to a predictably profitable investment for elections -- perhaps this year more than most -- continues to be champagne and kleenex.