Since the study of elasticity I have begun to look at things a little bit differently. There are countless times when I wonder whether or not a good or a service is relatively elastic or inelastic in regards to many things. During this semester I have also been taking an investments course and as part of our fundamental analysis we decided that the Presidential election could have a significant influence on the market as a whole and an even greater influence on our energy sector focus. The question being then; are the financial markets relatively elastic or inelastic based on a political election? We said that it had to be quite elastic based simply on the campaigns that were run and the debates that were heard.
Unfortunately, we were contested during the presentation of our beliefs. Many brought up the feeling that an election for political office would have very little, if any, influence on the financial markets. They said that there was far too much weight in other areas to believe the election could make a major play.
I can assure you that we now know that the markets can be extremely elastic to a President’s election. The markets are fully aware of what each individual believes, plans, and understands. They can then drop or climb based on the projections of a President’s role in our economy.