Investors are getting good at expecting the worst. Here's what the smart worriers should be doing now, says this strategist.

Investors are waking up to political uncertainty as Democrats put up a better-than-expected midterm fight, casting doubt on a Republican “wave.” A market-preferred split government remains a solid possibility as the votes continue to roll in.

“We’re in this incredibly painful environment where investors are just checking the boxes. They’re extremely data dependent, they’re very event-focused and on that end, they seem to be expecting the worst for everything,” Cox said in an interview on Tuesday. What’s a smart, worried investor to do? “This past year has shown us that forecasting is a silly game, so we’ve been telling customers for a while now to think about barbell strategies,” she said. “How you can maintain some exposure to risk but at the same time, how you can stay defensive in case the situation gets worse and we do find ourselves falling into recession.”

Can markets move higher into the end of the year? Cox says yes, especially once midterm uncertainties are settled once and for all. And as an aside, history has shown stocks do better in the fourth quarter of a midterm year, she adds, providing the below chart. However, getting too cozy with that view is also a little dangerous. While the U.S. seems to be doing OK, the rest of the world isn’t, she says. “For example, no one is really able to predict what a major energy crisis in Europe will mean stateside.”

The buzz The battle for control of the U.S. House and Senate remains too close to call. Among the highlights, Democrat John Fetterman beat out a wealthy heart surgeon to win Pennsylvania’s Senate race, while author JD Vance, backed by former President Donald Trump, grabbed an Ohio Senate seat from the Dems. Also elected, the first Gen. Z member of Congress. Read more on congressional seats that flipped.Shares of Meta META are up in premarket as the Facebook parent announced 11,000 job cuts.

Finance Finance Latest News, Finance Finance Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Stocks rally, dollar dips as investors cling to China COVID optimism By Reuters*U.S. STOCK FUTURES RISE TO START THE WEEK AS INVESTORS LOOK AHEAD TO U.S. CPI, MIDTERM ELECTIONS - 🇺🇸 🇺🇸 They should go down NOT RISE for the election These reports are causing the markets to fluctuate like a roller coaster. I'm getting too old for all this excitement. But what the heck; you only live once. Bring it on. who cares about the economy , Powell will drive it off the cliff , why Main St gets crushed he thinks living with inflation is impossible WRONG so many other countries have higher inflation , Powell nets to think more major cause of inflation is price gouging
Source: Investingcom - 🏆 450. / 53 Read more »

U.S. stocks end higher, Meta jumps as investors eye midtermsWall Street ended sharply higher Monday as investors focused on Tuesday's midterm elections that will determine control of Congress, while shares of Meta Platforms jumped on a report of job cuts at the Facebook parent. VoteBlueTomorrow
Source: Reuters - 🏆 2. / 97 Read more »

Investors increasingly confident of Ripple's victory over SEC: CoinSharesA report from CoinShares has pointed to a third consecutive week of inflows into XRP investment products, implying improved investor confidence over Ripple's legal tussle with the SEC.
Source: Cointelegraph - 🏆 562. / 51 Read more »