South African political parties

Global elections: an investment perspective

The Divided States of America, the Battle for Britain and our very own Coalition Conundrum – the stakes are high as over 60 nations go to the polls this year. Find out how markets are reacting and how elections influence investment strategies. Investec Wealth & Investment Chief Investment Strategist Chris Holdsworth shares his insights on what election outcomes matter most to markets, and how investors should navigate this time of uncertainty. Listen to the latest episode of our No Ordinary Wednesday podcast.


This year is one of the most significant years for democracy in recent history, as half the world’s population heads to the polls. The impact of over 60 nations voting will undoubtedly have ripple effects on the global economy as shifts in government and fiscal policy take hold, but what will this new economic order look like, and how can investors prepare?

In the latest episode of No Ordinary Wednesday podcast, Investec Wealth & Investment Chief Investment Strategist Chris Holdsworth shares his insights on what election outcomes matter most to markets, and how investors should navigate this time of uncertainty.

Key markets voting in 2024

Elections often come with a degree of uncertainty for markets, but this year adds a level of complexity with a large number of key markets in developed countries and emerging economies going to the polls with implications for global markets.

In Asia, Taiwan‘s elections took place against a backdrop of simmering tension with China over years of territorial disputes. Staying in Asia, the largest election in the world will take place in India which has seen significant economic success and investments under the leadership of Prime Minister Narendra Modi.

In Europe, the one-man race of Russian President Vladimir Putin went ahead as the war with Ukraine rages on, and in the United Kingdom, the Labour Party is poised to take over from the Conservative Party that has been in power for 14 years.

In North America, Holdsworth says that all eyes will be on the most important election of the year that will see current US president Joe Biden square off with former president Donald Trump.

He points out that if you look at data from the past 100 years, stock markets do perform better under Democrats than under Republicans. However, during Trump’s presidency, the S&P 500 performed exceptionally well.

“Now that could be just an artifact of the data and not something that's systemic, and it might not be replicated,” says Holdsworth.  “It's one of those things where unfortunately it's too soon to tell, even with a hundred years’ worth of history.”

Hedging against uncertainty of elections

Elections bring uncertainty particularly around fiscal policies and geopolitics which does not bode well with investors. The state of play has implications for the global economy and markets.


Investec Wealth & Investment Chief Investment Strategist Chris Holdsworth
Chris Holdsworth, Investec Wealth & Investment Chief Investment Strategist

There's a common theme running through all the elections with regards to investor concerns, and that's around fiscal policy. Over the past decade or so, we've seen rising debt to GDP from most countries with a couple of exceptions. At some point, governments are going to have to become more fiscally prudent.


With potential changes on the horizon due to elections, investors are nervous about any volatility that ensues. “In this era of heightened uncertainty, which we don't think is going to disappear soon, in our view there's definitely a need for an overweight allocation towards alternative and safe haven assets.”

In his environment, says Holdsworth, it is best to practice patience and weather the storm. “It takes a long time to be able to fully estimate what the impact of a decision is. And post any given decision, let's say a government changes its fiscal policy or there's a change in government, there's an immediate market reaction in the absence of a wider range of information.  And often the most practical and most profitable approach is to be patient, to wait for a bit more information and to have a fuller picture before you react. So, I think that the best approach in a volatile period is to batten down the hatches, ensure that you have sufficient safe haven assets in your portfolios, and then act patiently and wait for opportunities and take advantage of those as they appear.”

Does turbulence bring opportunities?

Although there’s a degree of nervousness with half the world’s population going to the polls,  there are also opportunities for investors.

Holdsworth points to South Africa’s potential, with elections set for 29 May. “Where there's muck, there's brass. If you look at the local markets on a forward multiple of roughly half of that of the US, our rand bond yields, unlike emerging market dollar bond yields, are very high relative to the US, by an extra eight percent or so.”

Investor concerns ahead of SA election

Investor confidence in South Africa remains depressed in the face of a struggling economy, electricity and logistical problems, sticky inflation and high interest rates.  But South African elections are only one of many key polls investors are watching. In this global context, they are adopting a cautious wait-and-see approach.

“There's no point taking a big bet ahead of an election if you're a foreign investor. There's only downside risk or why bother? I think what we're likely to see is foreign investors still sitting on the sidelines until A, we get the result, but B, even post the result, we still need to see what impact that result is going to have on domestic policy. And that's going to take a little while to, to come about. 

“I think at best, we're probably looking until February next year when the budget is announced before we land up with foreigners really willing to meaningfully take a stake and a risk in SA. And until then, it's probably worth their while to sit on the sidelines and wait to see what develops,” says Holdsworth.

Listen to the podcast for more insights about the impact of global elections.

Podcast key moments:

00:00 – Introduction

01:24 – What are the key elections investors are watching and why?

02:49 – What strategies can investors employ to hedge against the ambiguity of elections?

03:40 – Are bond markets concerned about the big election year?

05:05 – Are there any opportunities for investors?

06:07 - How will this historic year likely shape investment decisions for the medium and long term?

07:19 - What are some of the common mistakes investors make during a time of election anxiety or a period of uncertainty?

08:40 - What can we expect from the currency markets due to uncertainty and risk associated with elections in major economies?

11:02 - What economic indicators do you think are going to be impacted by the global elections?

12:14 – What is the impact of the US elections?

13:20 - Are there any market or investor concerns as South Africans head to the polls?

14:35 – Post elections, what are some of the economic missteps we should watch out for as a country?

16:05 – Staying the course during election uncertainty



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