Why it’s a dumb idea to short stocks before Election Day

Some investors apparently think it’s smart to take advantage of the increasing panic over the presidential election and sell off stocks before Election Day, then quickly reinvest after the election to pocket some easy profits, according to Pragmatic Capitalism‘s Cullen Roche. Well, that’s actually a really dumb idea, he explains. “Big political or entertainment events are usually not worth churning your portfolio over. All this does is try to time a highly uncertain event while guaranteeing that you’ll incur higher taxes and fees,” he writes in a blog post. “Timing the market is usually difficult, not only because your analysis has to be right, but you have to predict … when and how it prices in that analysis.”MB