US midterms: three scenarios for investors

As was the case with the 2016 Brexit vote, the 2016 US Presidential election and the 2017 UK general election, predicting the outcome of the upcoming US midterms has become something of a pastime for investment and political commentators. Yet as these examples so clearly demonstrate, political events are, by their very nature, political, and therefore very difficult to predict. We believe there’s more value in preparing for a range of eventualities.

Let’s consider the three possible scenarios for the outcome of the vote (to each of which we assign subjective probability) and how both the policy and investment narrative could shift under each one.