In the U.S., it’s normal for policy uncertainty to increase before a major election, then decrease once the results are in. In any other election cycle, the predictable increase and decrease in uncertainty offers shrewd managers unique opportunities for operating, investment, and financing decisions. Election years are the time to pursue projects that entail minimal commitments and expenditures but will produce tremendous first-mover advantage and large payoffs if post-election policy turns out to be favorable. This year, however, is different. The authors explain why and outline several considerations for company leaders planning their investment decisions.
