By John McDonald
Speaker of the House, Nancy Pelosi, has been at the forefront of the impeachment conversation for more than a year.
First, she was for it, albeit allegedly with great reluctance. Then, she was against it, allegedly with great reluctance. Then she went through with it, allegedly with great reluctance.
Now, her alleged great reluctance extends to actually handing over the articles of impeachment to the Senate so that the president’s trial can commence.
This may be due to the fact that the results are essentially a foregone conclusion since the Republican Senate has basically promised to acquit President Trump on the two charges of abuse of power and obstruction of Congress.
There are a number of conspiracy theories in circulation about why Pelosi’s relationship to this historic impeachment is so strained, particularly given she achieved near-folk-hero status when she finally initiated the impeachment process.
The key factors for investors on either side of the aisle to watch as this theatrical display slogs forward are not about political preference, however. They are, instead, about your portfolio’s performance.
Here are 3 things every investor should know about Nancy Pelosi’s impeachment delay:
1. It’s all about the return on investment.
Pelosi might seem like she has waffled on the concept of impeachment, but the truth is that her delays and indecision are always strategic. She balances her constituents’ desire for blood with public sentiment about the president.
That is why she postponed impeachment for as long as possible: She did not want to alienate more moderate voters or have an impeachment trial in the process during the months immediately prior to the election.
Now, the delay is also about returns.
Those returns would take the form of new information that might enable the House to add more charges to the list before sending the articles of impeachment to the Senate.
As politicians on both sides of the aisle lose patience with the delay and it becomes apparent no new evidence is going to surface, the ROI on holding up the process is going to diminish.
“The House speaker may have now reached the point of diminishing returns in her strategy of holding up Trump’s Senate trial to try to force the GOP to admit new evidence and witnesses,” wrote CNN analyst Stephen Collinson.
2. As every investor should, Pelosi is tracking consumer sentiment.
Of course, Pelosi’s “consumers” are voters. Their feelings on the impeachment will have a huge effect on the 2020 presidential election, however, so Pelosi is likely using this window of delay to determine how best to sway public opinion since the outcome of the Senate trial is considered a foregone conclusion.
“Democrats know they don’t have the votes to convict President Donald Trump when the Senate convenes as the Court of Impeachment, so they are pursuing the case in the court of public opinion,” explained AP reporter Lisa Mascaro.
Like any savvy investor, Pelosi knows that consumer sentiment plays a big role in economic performance and in the returns associated with various investments.
For gold investors, for example, when the economy is volatile or the future looks uncertain, their preferred asset rises in value.
For politicians, that same volatility can be a good thing, if their party is currently not in the White House, and a negative thing if their party is in the White House.
Pelosi must weigh the advantages associated with the impeachment trial moving forward against the potential costs to her party if consumer (i.e. voter) sentiment leans toward sympathy for a president facing charges based on evidence that seems dangerously thin.
3. Impeachment proceedings are generally good for precious metals investments.
Whether they happen at the “right” time or the “wrong” time for the politicians involved, impeachment proceedings are generally good for investors holding gold and other precious metals in their portfolios.
This is not surprising since impeachment generally leads to feelings of uncertainty in the financial markets and causes investors to flee toward “safe-haven” investments like gold and other physical assets.
While this impeachment is likely to be a relatively anticlimactic process overall, it will still likely solidify gold’s early-2020 gains for the remainder of the first half of the year.