Though it may be unusual to hear from your investment team late on a Tuesday, we think you deserve to know what we've been thinking as the presidential race becomes closer than pollsters had suggested.

At the moment, Trump appears to be in the lead and stock market futures suggest that stocks will fall in the morning by 3-4 percent at the opening bell. Though this was to be expected with a Trump win – and is still within the confines of a normal correction – investors should consider that short term volatility may be with us for the next week or longer. To mitigate significant long term losses we continue to use stop loss orders on any positions we feel would be negatively affected by a downturn in the economy. However, as we wrote last week, a Trump presidency doesn't equate to a recession but may result in more than normal volatility. Therefore our stop losses are carefully placed to ignore tomorrow's short term and less significant decline. However, if markets fall further than normal, we are prepared to sell those positions that look most vulnerable.

It is still too close to call the winner of the presidential race at this hour. Though market indexes predict an early morning decline based on Trump’s lead, we believe that parts of the market such as healthcare, utility and consumer staples companies would celebrate his victory by advancing within this volatility. We want you to know that you already own shares of these companies and that we would add more should his presidency come to fruition.

As previously mentioned it is too close to call. Should Clinton make a late comeback in the race this evening and wind up winning, we would expect that markets will open up instead of down, but that is yet to be known. In either case, your team at Main Street is watching closely and is prepared.

We hope you find these thoughts helpful.

Sincerely,

Your Team at Main Street Research