E*TRADE Politics & Portfolios Study Reveals Divergent Investor Sentiment between Republicans and Democrats
Republicans skew more bullish than Democrats on the market yet less positive on personal impact
- Republicans skew more bullish: Republicans over-index in bullishness, with 38% saying they are more bullish toward the market than they were before the election. Democrats are slightly less optimistic, with 33% expressing more bullishness.
- Yet Republicans are also less positive about the personal impact of the results: Republicans are significantly more pessimistic across every measure tested, including how the new
Congresswill impact their investing portfolio, taxes, savings and bonds yields, inflation, debt interest, and cost of goods and services.
- Majority of Democrats expect more volatility: Democrats (53%) are more likely than Republicans (43%) to believe that volatility will increase as a result of the elections.
- Roughly half of Republican and Democrat investors plan to reallocate their portfolio: 50% of Republican and 49% of Democrat investors will either change their allocations, move into cash, or move out of cash into new positions.
- Democrats are significantly more likely to think the end of the bull market is near. While the majority of both parties believe the bull market will end within the next two years, Democrats skew significantly more likely (25%) to think the end is right around the corner, versus 17% of Republicans.
“Major events like this are a good time to revisit portfolio allocations—determine what level of risk you can live with, and rebalance accordingly,” said
The survey also explored voting investors’ thoughts on sector opportunities as a result of the midterm elections. Despite the divergence in overall sentiment, the results reveal strikingly united opinions on which sectors stand to benefit:
- Health care. Investors on both sides of the aisle believe this sector is the most likely to benefit from the midterms, as it soared post-election amid predictions that the proposed repeal of the Affordable Care Act would be taken off the table.
- Financials. Both Republican and Democrat investors think this recently beaten-down sector is ripe for a comeback post-midterms, as the administration can continue to push deregulation amid a backdrop of rising interest rates.
- Energy. This sector ranked third among both Republican and Democrats as having the potential to benefit from the midterms. Much like financials, energy has recently come under pressure but could rebound amid a favorable regulatory environment and a gridlocked
To view an infographic of the findings, visit www.etrade.com/commentary.
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About the Survey
This wave of the survey was conducted from
|As a result of the midterm elections, what is your outlook on the US financial markets?|
|Much more bullish||10%||10%||11%|
|Somewhat more bullish||25%||23%||27%|
|Somewhat more bearish||17%||18%||17%|
|Much more bearish||3%||2%||3%|
Please indicate the impact you believe the new Congress will have on the investments
Please indicate the impact you believe the new Congress will have on that taxes you pay
Please indicate the impact you believe the new Congress will have on the yields you are
Please indicate the impact you believe the new Congress will have on the inflation you may
Please indicate the impact you believe the new Congress will have on the interest you pay on
Please indicate the impact you believe the new Congress will have on the prices you pay for
As a result of the US midterm elections, do you think market volatility will...
|Stay the same||41%||37%||43%|
|Amid an unprecedented bull market run, how many years do you think we have left?|
|The end is near||21%||25%||17%|
|I don't know||12%||13%||11%|
|As a result of the midterm elections, which of the following strategies are you planning to deploy?|
|Move out of current positions and in to cash||13%||15%||11%|
|Move out of cash and in to new positions||16%||16%||16%|
|Change the allocations in my portfolio||19%||18%||22%|
|Make no changes to my portfolio||51%||51%||50%|
|Which sectors do you think will benefit most from the midterm election? (Top three)|
The information provided herein is for general informational purposes only and should not be considered investment advice. Past performance does not guarantee future results.