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Biden Won. What's Next For The Stock Market?

It's official now.

Biden had won.

The stock market seemed to receive the news well as the election was in progress on Friday, 6 Nov, while Mr Biden was in the lead prior to the official announcements.

What's next for the stock market now?

Some of my friends were jittery about the recent US election and stood on the sideline.

The more pessimistic ones had sold their existing positions in view of the "impending storm". Especially from the recent scare from the late October market drop.

To me, it doesn't matter if Biden or Trump won the election.

It doesn't matter if Trump refused to relinquish his position smoothly and make things difficult for Biden.

Neither does it matter to me if the market was to fall again due to any "freak happenings" (whatever it may be).


Well, it shouldn't be...if you understand my thinking process.

Regardless of the macro happenings, I'm happy with my current portfolio structure. I have confidence that the companies I invest in will be able to do well in their respective fields and continue to bring in revenue and profits.

Companies like Tesla (Nasdaq: TSLA) and Microsoft (will continue to do well. Others like DBS and Thai Beverage will have clients continue to use their products and services whether the blue or red team wins.

Isn't it true?

Having said that, I must also acknowledge that macro happenings does have an impact on the stock market in general.

The election results will definitely cause volatility if the results were different from the current one. Each team has a different set of philosophies and with Biden winning, there is a high possibility the US & China trade tension will cool down.

Chinese stocks may have a higher upside. Ant IPO may consider listing in US in the near future? Who knows right?

As long as there are major happenings, the market will have a knee-jerk reaction.

The most important element, in my opinion, in the investing process is to have a long term horizon.

I always subscribe to Benjamin Graham's philosophy,

In the short run, the (stock) market is like a voting machine. But in the long run, the market is like a weighing machine.

As such, rather than letting the macro dictate when I should sell my investments, I decide based on the company's fundamentals (if the company is making profits, having a sustainable revenue model etc).

Thus far, this model has served me well. My overall portfolio (a mix of both local & US companies as well as unit trusts) is up 49.6%. Given that a large chunk of my US portfolio is in the tech sector, most of the gains are attributed to Covid.

If having a stress free investing journey is something you are looking for, then I encourage you to take a longer-term approach with the company's fundamentals in mind rather than focusing on the macro (which most of the time, has a lesser impact than most people attribute it to be).

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