The market’s reaction to the November election outcome stands to be muted at a time when economic headwinds from the pandemic matter far more than tax policy or trade friction, suggests Jack Bowers, market strategist, fund expert and contributing editor to Fidelity Monitor & Insight.

The future of corporate earnings is not so much in the hands of politicians these days. What matters far more is progress on a Covid vaccine, how soon consumers resume normal activities, and the Fed’s actions.

I’m not saying that taxes, regulations, health care, stimulus measures, and trade don’t matter. It’s just that regardless of who wins, the main focus will be restoring the economy.

Biden’s tax plan would roll back some of Trump’s corporate tax cuts, which in theory might trim the value of stocks 5% or so. But coming at a time when many firms have carryforward losses that could run for years, the practical impact would be limited.

On the personal side, for those earning more than $400k annually, Biden plans to restore the top personal bracket to 39.6% (up from its present 37%), while also adding Social Security taxes and reinstating deductions for wage-earners above that threshold.

Such changes might have a small effect on real estate prices but it’s hard to see much impact on consumer spending or stock prices. Proposed changes to capital gains are more dramatic, but not necessarily market-moving.

If long-term gains exceed $1 million in any tax year, Biden would tax additional amounts as income — a tactic that would encourage investors to avoid additional selling once the threshold is reached.

He would also roll back the estate tax exemption to 2017 levels and scrap the step-up in cost basis on inherited investments. Those proposals might prompt a rush to transfer assets to heirs (especially those in lower tax brackets), but not a mass liquidation.

Markets tend to rally on the removal of uncertainty, and right now the uncertainty caused by the pandemic is greater than the uncertainty caused by the election or tax policy.

As such, try to avoid any major market timing moves before or after the election. Stick with your long-term investing plan, and you'll almost certainly be rewarded over the long run.

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