Political Instability Is Not The Same As Financial Instability

It can be difficult to discern between financial and political instability. Global capital markets often mirror tempestuous political campaigns, eliciting financial anxiety that might not have otherwise existed.

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Political Instability

To illustrate an example of this behaviour, let’s reach back to November 22, 1963. It was the day that President John F. Kennedy was shot and killed as he rode through a motorcade in downtown Dallas, Texas. President Kennedy’s assassination created panic on Wall Street. After the S&P 500 Index dropped by 2.8%, markets were closed around 2pm. When investors realized that the assassination was a tragic political and...