Decoding U.S. Political Risk in Investment Strategies
The U.S. political landscape, with its symbolic events and institutional dynamics, has long served as a barometer for global investor sentiment. From presidential elections to congressional gridlock, political symbolism shapes perceptions of risk, influencing asset allocations and market volatility. Recent research underscores how these symbolic cues—whether a contested election or a policy shift—act as catalysts for investor behavior, often amplifying short-term uncertainty while masking long-term economic fundamentals.
The Mechanics of Political Risk and Investor Behavior
Political connections and institutional symbolism directly impact equity markets. Firms with political ties (PC firms) exhibit less informative stock prices,…
