In just a few weeks time, the ballots will be in for one of the most controversial elections in U.S. history. Whether the tally ends in a Clinton or Trump presidency, it’s difficult to know the potential range of implications that the 2016 election will have on markets.
In the mean time, investors are wondering how to best position themselves. How could the election possibly affect their portfolio, and how can they hedge against tail risks?
Market Performance in Election Years
The good news for investors is that historically, the market has performed well in election years with the S&P 500 ending up in positive territory 82% of the time.
The bad news? This is clearly not a normal election.
The following infographic uses data from Fisher Investments to show how the S&P 500 historically performs during U.S. election years, as well as during the terms of specific presidents.
The aggregate data is clear – here’s how the S&P 500 does in different years of the presidency:
|Year of Term||Positive Returns||Negative Returns|
Even though the election year (Year 4) has positive returns 82% of the time, things obviously get murkier when we look at the current situation.
Clinton and Trump are the two most disliked candidates in history, and third-party candidates such as Gary Johnson, Jill Stein, and Evan McMullin are polling relatively high in certain states.
Some see a Trump presidency as a guarantee for extremely volatile markets, while others see a Democrat landslide as also posing a huge market risk. Meanwhile, there are all kinds of weird hypothetical situations that could occur that would likely give traders migraines.
One of these tail risk events was highlighted by Nate Silver in early October. It involves Gary Johnson winning his home state of New Mexico (where he is polling at 24%) and at the same time neither Trump or Clinton getting enough votes to win the Electoral College. It’s unlikely, but still possible.
No matter how the results shake out, this election year will have long-lasting implications for all market participants, and it is likely that many lessons will be learned by traders.
Ranked: The World’s Top Diamond Mining Countries, by Carats and Value
Who are the leaders in rough diamond production and how much is their diamond output worth?
Ranked: World Diamond Mining By Country, Carat, and Value
Only 22 countries in the world engage in rough diamond production—also known as uncut, raw or natural diamonds—mining for them from deposits within their territories.
This chart, by Sam Parker illustrates the leaders in rough diamond production by weight and value. It uses data from Kimberly Process (an international certification organization) along with estimates by Dr. Ashok Damarupurshad, a precious metals and diamond specialist in South Africa.
Rough Diamond Production, By Weight
Russia takes the top spot as the world’s largest rough diamond producer, mining close to 42 million carats in 2022, well ahead of its peers.
Russia’s large lead over second-place Botswana (24.8 million carats) and third-ranked Canada (16.2 million carats) indicates that the country’s diamond production is circumventing sanctions due to the difficulties in tracing a diamond’s origin.
Here’s a quick breakdown of rough diamond production in the world.
|5||🇿🇦 South Africa||9,660,233|
|10||🇸🇱 Sierra Leone||688,970|
|18||🇨🇮 Cote D'Ivoire||3,904|
|19||🇨🇬 Republic of Congo||3,534|
Note: South Africa’s figures are estimated.
As with most other resources, (oil, gold, uranium), rough diamond production is distributed unequally. The top 10 rough diamond producing countries by weight account for 99.2% of all rough diamonds mined in 2022.
Diamond Mining, by Country
However, higher carat mined doesn’t necessarily mean better value for the diamond. Other factors like the cut, color, and clarity also influence a diamond’s value.
Here’s a quick breakdown of diamond production by value (USD) in 2022.
|5||🇿🇦 South Africa||$1,538M|
|9||🇸🇱 Sierra Leone||$143M|
|19||🇨🇬 Republic of Congo||$0.20M|
|20||🇨🇮 Cote D'Ivoire||$0.16M|
Note: South Africa’s figures are estimated. Furthermore, numbers have been rounded and may not sum to the total.
Thus, even though Botswana only produced 59% of Russia’s diamond weight in 2022, it had a trade value of nearly $5 billion, approximately 1.5 times higher than Russia’s for the same year.
Another example is Angola, which is ranked 6th in diamond production, but 3rd in diamond value.
Both countries (as well as South Africa, Canada, and Namibia) produce gem-quality rough diamonds versus countries like Russia and the DRC whose diamonds are produced mainly for industrial use.
Which Regions Produce the Most Diamonds in 2022?
Unsurprisingly, Africa is the largest rough diamond producing region, accounting for 51% of output by weight, and 66% by value.
|Rank||Region||Share of Rough|
Diamond Production (%)
|Share of Rough
Diamond Value (%)
However diamond mining in Africa is a relatively recent phenomenon, fewer than 200 years old. Diamonds had been discovered—and prized—as far back as 2,000 years ago in India, later on spreading west to Egyptian pharaohs and the Roman Empire.
By the start of the 20th century, diamond production on a large scale took off: first in South Africa, and decades later in other African countries. In fact between 1889–1959, Africa produced 98% of the world’s diamonds.
And in the latter half of the 20th century, the term blood diamond evolved from diamonds mined in African conflict zones used to finance insurgency or crime.
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