It seems that Donald Trump has gotten two convention bounces. The Republican Presidential candidate has had a 17-point swing in the past three weeks, going from 10 points behind Hillary Clinton to a 7-point lead in the polls on average.

That’s just nationally. Trump is leading Clinton solidly in states like Nevada and New Hampshire — states Barack Obama carried twice. George W. Bush carried Nevada twice and New Hampshire in the 2000 election (but not 2004). Trump is leading in Pennsylvania Ohio, and Florida, although not in another swing state, Virginia. Obama carried all four states in 2008 and 2012.

But then later points this week swung sharply towards Clinton. In a recent CNN poll, the Democratic nominee led by nine.

There are a lot of caveats to this surge in the polls. First, there’s a high level of uncertainty.

While Trump polls slightly better when third party candidates are added, there’s still nearly 15 percent avoiding the major parties — about three times the norm. A recent poll in Utah showed a horse race in the state between Trump, Clinton, and libertarian candidate Gary Johnson. We could see the first electoral college votes for a third party since 1968.

And Clinton’s big swing came about by changed methodologies in the polls. In the aforementioned CNN poll, voters aged 18-34 weren’t represented at all. While youth voting numbers tend to be low, they’re not that low.

Both candidates have high “negatives.” Voters view both skeptically, with Clinton taking the lead on that front following her non-indictment by the FBI.

Why all the talk about polls? Because it ties into investing.

When it comes right down to it, investing is about forecasting. You want your predictions about the future to play out. That may be true of anything from an individual stock’s earnings next week to the broad market over the next decade.

You don’t have to be perfectly right. If you expect a stock to beat the market by 10 percent and it beats it by 5 percent, you’re doing great. Getting the direction right is what matters.

Stocks mostly rise over time. But when they do have periodic bear markets, years of gains can be wiped out in weeks or months. That’s a normal process to wring out speculators and bring valuations down to levels that entice more people back into stocks.

But it’s not just about successful forecasting at times. Sometimes you need to think about the political picture and what it can mean for your wealth. While the president isn’t directly responsible for the economy (don’t tell Bill Clinton), the agenda set by the president can, if passed into law, change the rules of the investment game.

And with the conventions behind us, both Trump and Clinton have laid their case for the direction America should go in.

For Hillary Clinton, that means riding Obama’s tailcoats and promising a “third term” of his policies. While that sounds savvy, that means a continued lackluster economy with the heavy hand of government pressing down. It also means a continuation of today’s monetary policy of zero to near-zero interest rates.

That’s not horrible news — if you’re an investor. As long as money is cheap, you can borrow it and use it to buy stocks, bonds, real estate, or any other asset spinning off cash. If your cost of cash is cheap enough, say 2-3 percent, you can buy up higher-yielding assets and enjoy making money on the spread between your returns and your cost to borrow.

Again, that’s great. But to get a great deal on a loan, you have to show a bank that you don’t need the money in the first place. For most Americans, even a $500 emergency would be a tremendous setback, according to a recent Wells Fargo survey.

Trump, in turn, promises to Make America Great Again ®™ by bringing back manufacturing jobs. But many manufacturing jobs aren’t cost-effective in America. And we still lead the world in manufacturing, we simply do it more efficiently than third-world countries by using robots and other means of production.

If we are able to renegotiate trade deals, as Trump suggests, we might find a middle ground where more full-time, middle-class blue-collar jobs can be created in the US.

That’s great for the unskilled market. But such negotiations could lead to a trade war if they don’t go well. And if they do go well, higher labor costs for companies like Apple (AAPL) mean lower profitability. When profits fall, so do stocks.

But, again, no president operates in a vacuum. A President Trump would have to work with other branches of government. A President Hillary may have to make unpleasant economic decisions about interest rates thanks to a stubborn bond market, just as her husband had to deal with it while in office.

Investors should be wary of what changes may come down the pike. But government isn’t just one man or woman. It’s 535 elected representatives and senators, 8 unelected lifetime judges, and over a million employees throughout various government agencies. Most of today’s new laws come from those agencies. That’s the biggest danger. While theoretically accountable to Congress, most agencies get a free pass. This unelected and nearly unaccountable army of bureaucrats wields substantial power.
 

Even with that fact, markets will likely shake off their gentle trading of the past month as we get closer to the election. Instead of a 1 percent day being a big move, 2-3 percent moves on a daily basis may become the norm.

Investors today would be wise to take profits on any positions up substantially since the start of the year. For positions you’re looking to hold, selling covered call options is a great way to keep shares and grab additional income.

Election Day is in early November. It’s no surprise that, historically, October has some of the worst market selloffs in history, like 1929, 1987, and 2008.

Yet September is historically the worst performing month on average for stocks, with about a 1 percent decline. That makes August the best time to consider your strategy for the rest of the year and plan accordingly — with an eye toward substantial market uncertainty in the months ahead.

Andrew Packer is a Senior Financial Editor with Newsmax Media. He currently writes the Insider Hotline investment advisory, serves as investment director for the Financial Braintrust, and is managing editor of Financial Intelligence Report. To read more of his work, GO HERE NOW.