Half of respondents in a survey released Thursday by E-Trade Financial said they expected U.S. midterm election results to have a positive effect on their investment portfolios, while a quarter thought it would have a negative effect.
Younger investors were particularly optimistic about the November vote, with 70% having a positive outlook, compared with just 34% of baby boomers.
Respondents were split on their views of the two major political parties. Fifty-one percent said the Republican Party would be more beneficial to their portfolios; 49% said the same of the Democratic Party.
Sixty-four percent of surveyed investors expected the market to rise this quarter, up 12 percentage points from the third-quarter survey results.
As for another interest rate hike, 63% of investors said the U.S. economy was healthy enough for one more hike in the fourth quarter, up 6 points from last quarter and 4 points from the 2017 fourth quarter.
"The midterm elections bring a lot of question marks to the table, but we're seeing relatively positive and hopeful sentiment, particularly among young investors," Mike Loewengart, vice president of investment strategy at E-Trade, said in a statement.
Loewengart noted that the election results could have a ripple effect on the economy, with trade, tax reform and government debt all subject to change. "While we're on strong economic footing, we're starting to see increased volatility, and there are some headwinds investors should be aware of, such as trade, inflation, housing weakness and ballooning government debt."
