New bipartisan support and policymaking can change many things. Before the outcome of the midterms, and before Democrats gained control of the House of Representatives, it was clear which government policies were priorities. For Wall Street, it meant investments could safely be forecasted to back Republican policies and investors could cash in. However, now with Democrats having the power to make significant changes in healthcare, taxes, and the escalating China trade war, these safe investments are looking a little murkier.
Republicans losing control of the House could lead to a shakeup on Wall Street. Policymaking will no longer be controlled by a single party and could generate a volatile stock market. As the priorities of policies become unpredictable, so do investment opportunities. The outcome of the midterms can change many unknown aspects of the stock exchange, however, certain things are already evident.
Volatility Means a Boom for Some Businesses
The stock market has seen an increase since the midterms in the anticipation that Republicans and Democrats will work together to keep the economy rolling. A split Congress means bipartisan support on many policies — leading to funding for many different businesses. As opposed to one political party backing specific types of companies, we will now have both parties supporting a more extensive set of industries.
With an emphasis and interest on an all-encompassing span of companies, some may see a decline while others may see an explosion. However, Democrats shifting attention to particular companies while Republicans maintain focus on companies of their interests can make for an overall business boom.
Furthermore, specific job roles will become more critical than ever when government policies become unclear. To maintain financial stability, financial analysts will be needed for their expertise and commercial insight to determine the direction of a company during these uncertain times. Additionally, government auditors can help businesses and investors determine the course of our new political climate, and understand where the government is placing money and importance on specific policies. This awareness can help investors and businesses calculate which moves to make next in an unpredictable future.
Although it may be hard to determine which industries and businesses will see a surge, some will. This volatile stock market means that you have the opportunity to make some great investments if you choose correctly. Any stock market analyst will tell you a volatile market is extremely hit or miss for your money. However, investing in a hit can mean substantial profits, and it may be well worth the risk.
A volatile market also means that while your investment can be initially prosperous, your fortune can change in an instant. Keeping a close eye on your finances and managing your trades such as trailing stop loss can be an incredible money-saving strategy as these uncertain times will cause stocks to rise and fall uncontrollably. A well-prepared investor can take advantage of these lucrative opportunities.
Trying to Predict Volatility
While you can take advantage of an unpredictable and volatile stock market, the wrong decisions might bankrupt you. Wouldn’t you like to have better odds than just relying on instinct? To maximize your profitability, predictive analytics can significantly influence your decision making in the stock market.
The stock exchange produces an enormous amount of data daily. We now have the technology to harness this data, analyze it, draw out insights and make data-driven decisions using predictive analytics. Businesses are now relying on predictive analytics to increase efficiency and income while minimizing risk. The accountants and financial analysts of the world would do well to include predictive analytics in their business decisions as well as investments when going forward in a stock market that is hard to predict.
Uncertain policymaking can be good for business and investing. Changes in healthcare, taxes, and other industries will have winning and losing companies, and wouldn’t you like to invest your money in the winning companies? It is just a matter of which policies will boost which — and if the decisions and investments you make will be profitable or not. Some individuals and businesses will profit from the outcome of the midterms, and with time, we will see who comes out on top.