As we in SA know all too well, election outcomes can have a massive impact on the markets. But when you’re talking about US elections, the market fluctuations have been apparent for some time already.

Now it all comes to a head in less than two weeks as Americans prepare to go to the polls on 5 November. And presidential candidates Donald Trump and Kamila Harris have very different policies and agendas, so swings either way can send ripples through the markets.

Here’s what you need to know to prepare and protect your investments going either way…

Shining some light on 🔦 

• Market impact: What if Trump or Harris wins in the US?

• Prosus’s AI retail, gold surge & the big Bitcoin breakout.

• Stock update: Higgo’s Top 11 stock picks for 2024.

• Earnings calendar: Who’s reporting on revenue, when.

• How to invest safely when markets rebound and fluctuate.

THE SPOTLIGHT

How Could the US Election Impact Markets?

There’s no question that the upcoming US elections have been impacting markets recently. And it’s all coming to a head in 13 days’ time.

Americans will head to the polls on November 5, 2024, with results normally confirmed in a few days before the Electoral College casts its votes in December and the new president takes office on January 20, 2025.

Who will it be? Well, polling opinion aggregators like The Hill only recently adjusted for a 52% chance of a Trump win, while Polymarket puts it at 64% Trump.

The thing is, you never really know. And as both UK-based trading platform IG and Alex Sebastian for The Times points out, the candidates (Trump and Harris) have very different fiscal policies and aims in mind.

Here’s how wins either way could pan out for investments…

Trump: Pro-Business, Pro-Oil, and Bitcoin Influence

If Trump wins, we can expect tax cuts, deregulation, and support for traditional sectors like fossil fuels, defence, and banking. 

Bitcoin has shown a tendency to surge during Trump's wins, as seen recently after an assassination attempt, making it a potentially volatile but significant asset to watch. 

A stronger dollar and rising inflation could boost US Treasury yields. Trade tensions, especially with China, may rise, creating further market volatility. His “America First” approach might benefit domestic sectors but pressure industries reliant on foreign supply chains.

Harris: Clean Energy and Healthcare Growth

On the other hand, Harris’ administration would likely emphasise renewable energy and healthcare. Green technology sectors – solar, wind, and electric vehicles – could benefit from expanded investment and tax incentives. 

Conversely, traditional energy companies could face more stringent regulations. 

Infrastructure investment is also on the agenda, which could benefit construction and engineering firms. Harris may focus on a more collaborative foreign policy, reducing trade tensions, stabilising supply chains, and providing a more predictable market environment.

Balancing Uncertainty

While these differences create stark investment strategies, it's critical to remember that US elections often cause short-term market volatility. 

Investors should focus on long-term trends and diversification to weather any immediate market swings. Industries like renewable energy, healthcare, and tech may thrive regardless of the winner, while sectors like oil, gas, and traditional industries could see more variability.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

STOCKS AND ALL

📊 4Sight’s Growth: 4Sight Holdings (JSE: 4SI) posted a 20.1% revenue increase for H1 2024, reaching R541.9 million. Operating profit rose by 32.9%, driven by its focus on AI and innovation, with R5 million invested quarterly in AI and Copilot technology.

📉 Pan African Voting Shift: Pan African Resources (GB) saw a slight decrease in voting rights, with Allan Gray Proprietary Limited reducing its stake from 17.94% to 16.96% as of October 17, 2024. This change may affect shareholder dynamics and investor sentiment.

💻 Naspers’s New AI E-Commerce Vision: Naspers, through its Dutch-listed subsidiary Prosus, plans to leverage AI to transform e-commerce as part of a strategy to double the company's value and enhance emerging market services to expand Prosus’ portfolio beyond its key stake in Tencent. Recent actions include selling stakes in Trip.com and Superbalist, and continued buybacks to close the valuation gap.

🪙 Gold Prices Surge: Gold prices have soared, increasing by 32% this year, as investors turn to safe-haven assets amid U.S. election uncertainty and escalating tensions in the Middle East. Analysts suggest prices could hit $2,800 per ounce by year-end, driven by strong demand, interest rate cuts, and central bank gold purchases.

📈 Bitcoin’s Big Breakout: Bitcoin surged 10% last week, reaching $69,000, driven by election-related volatility and favourable crypto sentiment from both U.S. presidential candidates. Analysts predict a potential bull run, with targets between $180K and $300K. Technical indicators show room for further growth, despite possible short-term resistance around $72K–$74K.

WEALTH HACKER’S KIT

When Markets Move: Is It Safe to Invest Right Now?

South Africa is riding a wave of optimism. Interest rates have dropped, the Rand is strengthening, fuel prices have dropped and the two-pot retirement system is injecting fresh cash into the economy. 

But with the US elections looming and could bring global market fluctuations, how do you know when and where to invest safely?

1. Understand Market Rebounds

The market often rebounds quickly after a downturn, but timing your entry can be tricky. One key insight: trying to time the market perfectly can backfire. 

For example, in 2020, the global markets saw one of the fastest recoveries ever after the COVID-19 crash. Those who stayed invested through the dip saw far higher returns than those who waited for the “perfect” moment to re-enter. 

The lesson? Rather than chasing the best entry point, stay focused on long-term gains. This applies whether you're investing in stocks, ETFs, or even property.

2. Diversification is Key

With South Africa's improving economic outlook, the temptation is to pour all your money into local stocks or assets benefiting from the current recovery. However, it's essential to stay diversified. 

As global factors, such as the upcoming US elections, could still affect the market, holding a mix of local and international assets will cushion your portfolio. Offshore investments provide exposure to stronger currencies and markets, which can balance any potential local market volatility.

3. Long-Term Strategies Work

Short-term market movements can be volatile and unpredictable. Instead of reacting to every fluctuation, focus on your long-term goals. Historical data shows that those who hold their investments during uncertain times typically see better returns than those who try to jump in and out.

Monitor Key Indicators

While it’s impossible to predict exactly how markets will perform, certain indicators can guide your strategy. Keep an eye on South Africa’s inflation rate, interest rate changes, and the Rand’s performance against major currencies like the Dollar.

THE PEOPLE HAVE SPOKEN

Is Spending Two-Pot Money Now the Right Call?

🟨⬜️⬜️⬜️⬜️⬜️ ✅ Yes – if it means avoiding more debt, it’s worth it (10%)

🟩🟩🟩🟩🟩🟩 🚫 No – retirement comes first, don’t touch it (62%)

🟨⬜️⬜️⬜️⬜️⬜️ ⚖️ Maybe – depends on how bad things are financially (19%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🤷‍♂️ It’s tempting, but not sure if it’s smart (0)

🟨⬜️⬜️⬜️⬜️⬜️ 💡 I’d only withdraw if I could reinvest in something better (10%)

You’re right, that’s the best way to look at it, Shaun! ☝️

Yes, Holman, if you have good reason to believe the win will be much bigger, you could take the risk – especially if you're young enough to know you can make up for it if it goes the wrong way. 🤔

Right, Diederick, it’s an investment in yourself, whether you use it or not, it’s your wealth. 🧠