Election Noise

選舉噪音

by Charles Cheng, CFA

 

 

Another four years has past and we’re on the eve of another closely watched US Presidential election that will likely have significant effects on the rest of the world. Market updates, strategy pieces, and market forecasts reach investors inboxes with varying degrees of frequency as brokers and banks seek to keep their clients engaged with markets and to provoke trading activity. Many of them are now giving commentary regarding likely outcomes and implications of the elections for financial markets.

又值四年一期的備受關注的美國總統大選前夕。　本次選舉結果很可能對世界其他地區產生重大影響。　隨著經紀人和銀行尋求使他們的客戶貼近市場並保持交易活動，投資者的收件箱中關於市場現況、策略觀點以及市場預測以不同程度的頻率紛至沓來。　他們中的許多人現在正就可能的選舉結果和選舉對金融市場的影響發表評論。　

 

Every election cycle we see commentary that goes like this- 1) Democrats have a chance to take office which is a risk factor, or 2) Democrats are leading in the polls, but markets may go higher despite this “headwind.” Here are a few examples pasted from recent emails:

每個選舉週期我們都會看到這樣的評論-1）民主黨人有機會上任，這是一個風險因素，或者2）民主黨人在民意調查中處於領先地位，但儘管有這種“逆風”，市場仍然可能會走高。　以下是從最近的電子郵件中複製粘貼的一些示例：

 

 

“A possible Biden victory is one reason to underweight equities… Although it recently increased its allocation to Europe, it is underweight on equities at a global level.

The bank has held this position since March. ‘We are slightly underweight equities with the view that if Biden would come as a US President and reverse the tax cuts, that could bring some volatility ahead of us”

“如果拜登獲選那可以作為減持股票的理由之一……儘管最近增加了對歐洲的配置，但在全球範圍內卻減持了股票。　

該銀行自3月以來一直維持這樣的倉位。　 “我們稍微減持了股票，因為如果拜登擔任美國總統並翻轉減稅政策，可能會給我們帶來一些波動”。　

 

“The results of US elections are expected to have profound implications on the overall direction of equity markets, as well as relative performances of sectors. … notes that as opposed to the commonly held view, a Democratic sweep (i.e. winning the control of both White House and Congress) would not prevent global equities to grind higher over the 12 months after election.”

“美國大選的結果預計將對股票市場的整體方向以及行業的相對表現產生深遠影響。　 …注意到，這與普遍持有的觀點相反 — 民主黨席捲席位（即贏得白宮和國會的控制權）不會阻止全球股市在大選後的12個月內繼續走高。　”

 

 

We’re not going to debate the merits of one political party over another. Instead, this is an opportunity to be critical in a constructive way of information and ideas that people get from their investment service providers. The argument is that if the more left leaning party gets into power, this will mean higher taxes and more regulations and therefore is bad for companies and markets. In economics, the premise that lower taxes are stimulative to growth is both widely accepted and logical, so this is meant to accepted as a given from which the analysis then proceeds.

我們不是在這裡辯論這兩個政黨孰優孰劣。　相反，這是一個讓人們以建設性的方式來好好審視機會從投資服務提供機構那裡獲得信息和想法的機會。　而爭議點在於，如果較左傾的執政黨上台，這將意味著更高的稅收和更多的法規，這將對公司和市場不利。　在經濟學中，較低稅率促進增長這一前提既被廣泛接受又是合乎邏輯的，因此這被認為是一個既定前提，及所有分析的前提。　

 

 

However, according to The Economist, between 1926 and 2014, the US stock market has gained 11.2% under Democratic Presidents and 2.7% under Republicans, despite Democratic administrations tending to raise Federal taxes and Republicans lowering taxes. This is no secret- every election cycle also sees a multitude of articles posted on this same discrepancy over a variety of time periods. On statistical grounds, this is a pretty clear rejection of the hypotheses posed by those commentators above. In other words, the null hypothesis that Republican administrations are better for the market should be rejected. To be clear, that doesn’t mean you should go invest if a Democrat wins or sell down your portfolio if a Republican does. US and world markets performed very well during the administrations of both Obama and Trump.

然而，根據《經濟學人》的研究表明，在1926年至2014年之間，儘管民主黨政府傾向於提高聯邦稅而共和黨降低稅率，但在民主黨總統任內美國股市上漲11.2%，而在共和黨任內美國股市上漲2.7％。　這並不是什麼秘密——在不同時期的每個選舉週期內都會有大量文章發表同樣與事實出入的看法。　從統計學的角度來看，這個結果顯然是不支持上述評論者提出的假設的。　換句話說，共和黨政府對市場更有利這一空假設（虛無假設）應該被拒絕（結果不支持假設）。　需要說明的是，這並不意味著如果民主黨獲勝，您應該去投資；而如果共和黨獲勝，您就應該減持您的投資組合。　在奧巴馬和川普政府執政期間，美國以及全球股市都表現良好。　

 

 

Simple statistical tests are much better suited for disproving conjectures rather than predicting the future. The reality could possibly be that the political party in the presidency isn’t that relevant to the market and other factors matter much more. And in the current environment, with a market continuing to perform strongly despite a massive hit to growth and employment, and failed pandemic control measures, the impact of a policy like taxation is at best a minor consideration.

簡單的統計檢驗更適合於反駁推測而不是預測未來。　現實可能是，擔任總統職務的政黨與市場表現並不是那麼有關，而其他因素的影響可能更大。　並且，在當前環境下，儘管市場增長和就業受到嚴重打擊加上疫情控制失敗，然而股市依然繼續表現強勁，看來稅收等政策對股市的影響充其量只是次要考慮因素。　

 

 

What is clearer is that commentary that treats ideas as givens despite close to a century of contrary evidence should not be taken too seriously, even if the commentators appear to mean well. Most of the time, ideas are not as easily analyzed as with this simple political example particularly when it comes to the economy, but what can be tested, should be tested. Investors should take the time to periodically review how much of their current investment view is influenced by accepting ideas that may sound reasonable but that they have yet examined below a surface level.

更清楚的是，那些忽視近一個世紀的相反證據而想當然的評論，即使評論者的意圖是好的，也不應被認真對待。　在大多數情況下，各種想法是很難像這個簡單的政治例子那樣容易地被分析的，特別是在經濟方面。　然而應當加以檢驗的還是需要被檢驗的。　投資者應花時間定期檢查他們當前的投資觀念有多少是接收了那些可能聽起來很合理，但尚未經過深入研究的想法，的影響。　

 

 

Mr. Cheng is a managing partner at a Hong Kong based independent private investment office. This article reflects his personal views and not his firm’s and should not be viewed as an investment recommendation.

鄭先生為可承資本，一家總部設於香港的獨立投資辦公室之董事合夥人。　這篇文章反映了他的個人而非公司觀點。　該文章不應被視為投資建議。　

 

 

 

 

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