Wall Street breaks down how to trade the 2020 election, from a Trump triumph to a Biden blue wave

Wall Street breaks down how to trade the 2020 election, from a Trump triumph to a Biden blue wave
Reuters / Lucas Jackson

Hello everyone! Welcome to this weekly roundup of Investing stories from deputy editor Joe Ciolli. Please subscribe here to get this newsletter in your inbox every Tuesday.


Dear Readers,

By now you've probably had enough time to digest the flood of commentary around the coronavirus and what it means for markets. You may not have a clear idea about what exactly is coming next, but you have a decent idea of what scenarios could unfold.

Now that you've reached that point, how would you feel about the addition of a new market-moving force — one that could take the reins and make COVID-19 feel like a distant memory?

Whether or not you're ready, that moment has arrived in the form of the US presidential election. It's less than four months away, and Wall Street has already started turning its sights on what could transpire.


While President Trump claims that a Joe Biden victory would cause markets to skid, UBS recently surmised that a so-called blue wave Democratic sweep — including a Biden win — would actually be positive for markets.

The firm also noted the same goes for a red wave outcome. To them, political consensus is the most powerful catalyst of all, because of how much easier it would be to enact further stimulus. Not ones to be caught unprepared, UBS compiled a handful of strategies for a broad range of outcomes.

Read the full story: UBS has compiled an investing playbook for all the possible election outcomes. Here are the 6 trades it recommends to profit from a Trump triumph — and 10 for a Biden blue wave.

Meanwhile, Goldman Sachs has noticed a maelstrom of market-positioning activity swirling around the election. By their reading, investors are paying extraordinarily high premiums to hedge their portfolios against turbulence in November. And while Goldman acknowledges this is a good approach, it has its own ideas around how to handle the situation.

Read the full story: GOLDMAN SACHS: Wall Street is bracing for a historically wild stock market as the presidential election nears. Here's a surprising yet simple strategy for protecting your portfolio — regardless of outcome.


Stay tuned for more election analysis and actionable advice in the coming months. And don't get caught overlooking the myriad other market hurdles lurking out there.

To that end, the Investing team at Business Insider is here to unpack the ever-changing market landscape. See below for our best stories of the week, including a wide array of recommendations, strategies, and tips for navigating uncertainty.

Thanks for reading!

-- Joe

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Exclusive interviews with Gen Z day-traders throwing Wall Street for a loop

A wave of retail investors has flooded the stock market with speculative bets and unexpected picks — and Wall Street is struggling to make sense of the trend.

Business Insider spoke to two different Gen Z day traders — one experienced college student who runs a 14,000-person online community, and another who recently started dabbling — about their respective approaches to investing. Their comments shed valuable light on the day-trading revolution that's caught the attention of industry legends — and challenged how many of them think about markets.

Read the full story here:

Wall Street is being shaken to its core by a legion of Gen Z day traders. From a casual hobbyist to a 20-year-old running a 14,000-person platform, meet the new generation of retail investors.

A compelling investing opportunity not seen for 20 years

Wall Street breaks down how to trade the 2020 election, from a Trump triumph to a Biden blue wave
Rick RiederBloomberg TV


The incentives to diversify your portfolio by investing in Europe have rarely been as attractive as they are today, according to BlackRock's Rick Rieder. His reasons include the eurozone's response to the coronavirus pandemic and unique risks to the US investing outlook.

In an exclusive interview, Rieder detailed his rationale for investing in Europe and shared some of the bets he's making right now.

Read the full story here:

BlackRock's bond chief who oversees $2.3 trillion told us how the coronavirus crisis created a game-changing investment opportunity for the first time in almost 20 years — and shared 4 ways he's cashing in

How to generate "crazy" cash flow when investing in real estate

Wall Street breaks down how to trade the 2020 election, from a Trump triumph to a Biden blue wave
AP Photo/Wilfredo Lee

Matt DeBoth — a former Marine and successful real-estate investor — wanted to gain autonomy in his life after being told what to do for eight years. His first real-estate investment was a 20-unit apartment building that he house hacked.


He then leveraged that property, along with two others, to build the 174 unit portfolio he has today. Here's how he did it.

Read the full story here:

174 units with no prior experience: Here's the creative real-estate investing strategy a former Marine is using to generate 'crazy' cash flow

Stock pick central

Seeking experts who are willing to name names? Look no further:

Chart of the week

Wall Street breaks down how to trade the 2020 election, from a Trump triumph to a Biden blue wave
Goldman Sachs

You don't have to be a VIX scholar to understand the glaring takeaway from the chart above: The 2020 election is shaping up to be more turbulent than the prior two — and by quite a margin.


Goldman Sachs arrived at that conclusion by analyzing investor activity around the VIX, which is otherwise known as the stock market's fear gauge. The firm found that people are historically worried about market turbulence, and already taking measures to protect themselves.

Click here for more details

Quote of the week

"Forecast uncertainty is likely higher today than at any point in the last four decades. The election is not yet a driving force behind our shorter-term tactical guidance, but will increasingly be a core driver of those views."

Solita Marcelli, the Americas chief investment officer at UBS Global Wealth Management