Trust in major institutions in the U.S has never been lower.
If you feel that way, you should know it’s not just you.
There’s data to back up that feeling that you, and many of us, have.
The data below comes courtesy of the Pew Research Center in an article in their Trend magazine released earlier this month:
This spring, the Center reported that only 22% of U.S. adults said they trust the federal government to do the right thing just about always or most of the time. That’s down from 77% six decades ago.
Gallup reports that 32% of people have trust in churches and organized religions, down from 65% in the early 70s; over roughly the same time, trust in the medical system has fallen from 80% to 36%.
The story also notes that Gallup’s survey found that the United States ranks last among the G7 nations (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) in trust in its national government, the honesty of elections, the judicial system, and the military.
Just 20 years ago, the U.S. topped the list. But now Canada, the U.K., Germany, France, Japan, and Italy all show higher levels of trust.
That’s a stunning change in less than a generation.
And, frankly, right now is probably when the distrust is at a peak. The presidential election this year has been more contentious than ever.
Both sides seem more focused on personal attacks than solving problems, such as wars in Europe and the Mideast that could spread, fears about inflation returning (either through tariffs or premature rate cuts), and runaway government spending debasing the dollar.
No wonder trust is so low.
And there is another danger here … one you need to be aware of if you engage with the stock market at all.
The risk coming from uncertainty
Election day will not be the end of the uncertainty because this election is going to be disputed – regardless of who wins.
And that’s not just my prediction – that comes from investing legend Louis Navellier.
If you’re new to the Digest, Louis is a quantitative investing pioneer. “Quant” investing means Louis uses mathematical models and powerful computers to develop profitable trading strategies.
Louis has used this method to deliver market beating returns for more than 40 years. As I write on Friday morning, Louis has a 30X winner in Nvidia (NVDA) and an 800%+ winner in Super Micro Computer (SMCI) thanks to his quantitative system.
And this election reminds him of another from our recent history. Here’s Louis with the context:
Of the more than 100 million ballots cast, the 2000 presidential election was decided by 537 votes in Florida.
If you’re above a certain age, you’ll remember what happened.
Back then, many voters used punch-card ballots. And in some cases, the punched-out pieces of paper, called chads, didn’t fully detach, leaving “hanging chads.”
These incomplete punches made it unclear whether the voter had chosen a candidate or not, which led to disputes over how to count those ballots.
Long story short, the results were contested. Recounts were ordered, debated, challenged, halted, restarted, and challenged again.
The election was settled only 35 days later when the Supreme Court declared George W. Bush the winner.
This wasn’t only unsetting for millions of Americans. It also seriously upset investors.
In the week of the election, the S&P 500 was down 4.3%.
The average weekly drawdown for the S&P 500 is about 0.5%. So, we’re talking about a move 10 times steeper than the typical weekly loss.
Then, in the week of the Supreme Court’s decision, the S&P 500 dropped another 4.9%.
And that election wasn’t nearly as heated as the contest between Trump and Harris.
So, I expect the market chaos in November 2024 will make the chaos of November 2000 look mild by comparison.
Don’t let your feelings cost you money
During volatile market times, it’s easy for folks to let their emotions affect their decisions.
That only makes sense. You worked awfully hard for your money, and the threat of losing some of it is very real.
But Louis has examined the data – just as he has always done – and instead just danger, he sees an opportunity.
And it’s all tied to a key event that happens on November 6 – the day after election day. Here’s Louis again with some details.
Most folks didn’t pay much attention. But months ago, the Fed made an unusual shift in its meeting schedule.
It pushed the start of next month’s two-day interest rate policy meeting from November 5 to November 6.
Why?
Maybe they didn’t want to seem political…
Or maybe they wanted the option to be able to react after the election results start rolling in…
I’ll let you make up your mind about that.
But either way, come November 7, at 2 p.m. Eastern Time, the Fed will announce to the world whether it’s going to continue to cut key interest rates… and by how much.
What happens on November 6 will bring more volatility to the market. But Louis is getting ready for the opportunity ahead.
Louis will reveal his thinking next Tuesday at 7 PM ET. He’ll be sitting down with Charles Sizemore, Chief Investment Strategist at our corporate partner, The Freeport Society.
Louis and Charles will analyze the risks surrounding upcoming election chaos, and how to benefit from it. To reserve your seat for this event, click here.
At the event, Louis will give away a post-election trade for free. It’s a trade to make regardless of who wins the election.
Market volatility can make any investor act emotionally, but investors who use their wits don’t get scared by it – they leverage it for more gains!
Given the chaotic world we live in, it’s no wonder so many Americans feel a lack of trust in their institutions. Maybe by acting responsibly and fulfilling their promises, our institutions can bring some of that lost trust back.
But that’s going to take years… and the election is little more than a week away.
Emotions are running high, and market volatility feels like a sure thing.
Enjoy your weekend,
Luis Hernandez
Editor in Chief, InvestorPlace
