When people are faced with uncertainty, they find it harder to make decisions. It’s called the “disjunction effect” and financial experts say this applies to the election.
Interesting of note is that people feel inclined to hold off even if they make the same decision, regardless of what happens next.
“As a consequence, they may continue with the status quo, or a ‘do nothing different’ mentality until the uncertainty is resolved,” Michael Liersch, head of advice and planning at Wells Fargo, told FOX Business.
The election is a prime example, given that it’s a moment of extreme uncertainty, he noted.
“In line with research around the disjunction effect, people may delay major decisions – for example, a decision to buy or sell something – until they know the results of the election even if they will ultimately move forward regardless of which candidate wins,” Liersch said. “The bottom line: people may simply feel the need to know the result in order to take action.”
The issue is “uncertainty in and of itself can cause decision paralysis,” he continued.
Read full story at Fox Business.