• How would you diversify an investment portfolio through the following asset classes ahead of the Election?

The market is pricing in a Clinton victory, but there is still plenty of time for things to change.  If they do the markets will react to the proposed uncertainty of a Trump presidency in a violent manner.  Accordingly, I believe it makes sense to take a defensive stance in an investment portfolio. After all, if a Clinton victory is expected and priced in the upside in equities is likely limited and the risk will be to the downside.  T

               US Dollar – 0%

               Commodities – 20% (with gold receiving the largest allocation)

               Equities – 55%

               Bonds – 25%

  • Do you foresee any trading opportunities ahead of the Election? Which ones?

I believe we will see a stark increase in volatility as we head into the election and in its aftermath.  As is the case with most large events, the best course of action is to keep speculation mitigated ahead of the event to keep capital available to take advantage of potential anomaly pricing once the market has reacted. For instance, those who went long the S&P on the heels of the Brexit collapse likely fared well. Similarly, buying the British Pound into its collapse was initially a good trade. In short, traders should keep plenty of fire power available; any large fallout in the equity market or the US dollar could provide favorable opportunities for the bulls.

Due to the volatile nature of the futures markets some information and charts in this report may not be timely. There is substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

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