E*TRADE Politics & Portfolios Study Reveals Economic and Market Views Among Republican and Democrat Investors Post Election

While Republicans and Democrats diverge on economic outlook, a significant portion of both parties is not bullish on the market

E*TRADE Financial, LLC today announced results from its Politics & Portfolios study on voting investor sentiment after the presidential election:

• Both parties muted on market performance. While the majority of Democrats skew more positive, 44% are either bearish or believe the market will stay the same as a result of the election. Among Republicans, 62% are bearish or believe the market will remain flat.
• Republicans brace for volatility. Republicans (64%) are significantly more likely than Democrats (47%) to expect more market volatility after the election.
• Both parties are eager to revisit portfolios. Roughly three out of five of both Republicans (61%) and Democrats (58%) plan to make changes to their portfolio after the election.
• Democrats see shorter runway to recovery. More than three out of four Democrats (77%) believe election results will accelerate an economic recovery. On the other hand, half of Republicans (51%) expect the economy to decelerate.

“Traditionally there tends to be more stability in the markets after an election—but this year was anything but traditional,” said Mike Loewengart, Managing Director, Investment Strategy at E*TRADE Financial. “Investors continue to contend with big unknowns—the pending stimulus bill, the velocity of the ongoing pandemic, and even a contested election outcome. All these factors could remain significant drivers of volatility. While it may be tempting to play with portfolio allocations right now, it bears repeating: When it comes to politics and investing, try to tune out the noise. Keep financial decisions mapped to your personal timeline, goals, and risk tolerance.”

The survey also explored views on sector opportunities as a result of the presidential election:

• Health care:Though President-elect Biden advocated for the expansion of the Affordable Care Act, a split Congress could pose headwinds for sweeping reform. That said, 68% of the total surveyed see potential in the health care sector. Amid significant strides on the vaccine front, intrepid investors could be on the hunt for growth potential.
• Energy: Since a sustainable economy was another top campaign point from President-elect Biden, 40% of surveyed respondents believe the sector could stand to benefit especially in green alternatives.
• Information technology: The red-hot tech sector ranked third among investors. While the stay-at-home economy boosted tech names, almost 40% of surveyed investors think there’s more room to run as states reinstitute lockdowns. This sector tends to be highly scrutinized in the Beltway and a divided Congress could keep significant changes in regulation at bay.

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To learn more about the findings, view the Politics & Portfolios infographic.

About the Survey

This wave of the survey was conducted from November 9 to November 17 of 2020 among an online US sample of 789 self-directed active voting investors who manage at least $10,000 in an online brokerage account. The survey has a margin of error of ±3.50 percent at the 95 percent confidence level. It was fielded and administered by Dynata®. The panel is 50% Republican and 50% Democratic, as well as 40% female and 60% male, with a distribution across online brokerages, geographic regions, and age bands.

Referenced Data

As a result of the presidential election, what is your outlook on the US financial markets?

 

Total

Democratic

Republican

More bullish

46%

 

56%

 

38%

Much more bullish

15%

 

18%

 

13%

Somewhat more bullish

31%

 

38%

 

25%

No change

26%

 

27%

 

24%

Somewhat more bearish

19%

 

14%

 

22%

Much more bearish

9%

 

3%

 

16%

More bearish

28%

 

17%

 

38%

As a result of the US presidential election, do you think market volatility will…

 

Total

 

Democratic

 

Republican

Increase

55%

 

47%

 

64%

Greatly increase

22%

 

19%

 

25%

Somewhat increase

33%

 

28%

 

39%

Stay the same

26%

 

29%

 

22%

Somewhat decrease

16%

 

21%

 

10%

Greatly decrease

3%

 

3%

 

4%

Decrease

19%

 

24%

 

14%

As a result of the presidential election, which of the following strategies are you planning to deploy?

 

Total

 

Democratic

 

Republican

Move out of current positions and into cash

21%

 

19%

 

23%

Move out of cash and into new positions

18%

 

21%

 

15%

Change the allocations in my portfolio

20%

 

18%

 

23%

Make no changes to my portfolio

39%

 

41%

 

37%

Other

2%

 

1%

 

2%

Do you think the results of the election will ____ economic recovery?

 

Total

 

Democratic

 

Republican

Accelerate (Top 2 Box)

55%

 

77%

 

33%

Greatly accelerate

23%

 

33%

 

14%

Somewhat accelerate

32%

 

44%

 

19%

Neither accelerate or decelerate

16%

 

16%

 

16%

Somewhat decelerate

15%

 

5%

 

25%

Greatly decelerate

14%

 

2%

 

26%

Decelerate (Bottom 2 Box)

29%

 

7%

 

51%

Which sectors do you think will benefit most from the presidential election? (Top three)

 

Total

 

Democratic

 

Republican

Health care

68%

 

74%

 

61%

Energy

40%

 

44%

 

37%

Information Technology

39%

 

38%

 

41%

Financials

30%

 

35%

 

26%

Consumer Staples

26%

 

28%

 

25%

Consumer Discretionary

23%

 

23%

 

23%

Communication Services

19%

 

15%

 

25%

Industrials

16%

 

15%

 

16%

Utilities

16%

 

9%

 

22%

Materials

14%

 

11%

 

17%

Real estate

9%

 

9%

 

8%

About E*TRADE Financial and Important Notices

E*TRADE Financial and its subsidiaries provide financial services including brokerage and banking products and services to retail customers. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Commodity futures and options on futures products and services are offered by E*TRADE Futures LLC (Member NFA). Managed Account Solutions are offered through E*TRADE Capital Management, LLC, a Registered Investment Adviser. Bank products and services are offered by E*TRADE Bank, and RIA custody solutions are offered by E*TRADE Savings Bank, both of which are national federal savings banks (Members FDIC). More information is available at www.etrade.com.

The information provided herein is for general informational purposes only and should not be considered investment advice. Past performance does not guarantee future results.

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© 2020 E*TRADE Financial, LLC, a business of Morgan Stanley. All rights reserved.

E*TRADE Financial engages Dynata to program, field, and tabulate the study. Dynata provides digital research data and has locations in the Americas, Europe, the Middle East and Asia-Pacific. E*TRADE Financial and Dynata are separate and unaffiliated companies. For more information, please go to www.dynata.com.

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