Investors facing a crowded calendar tend to stop acting and start waiting. Election Day in the United States is today, the federal budget is tabled Thursday, November 5, and the Bank of Canada meets again on December 9 after raising its policy rate to 2.5% on October 28, its first increase in more than three years.
Waiting feels like prudence. The behavioural research identifies it as two specific biases working together, and the market record shows what the combination can cost.
Ambiguity Aversion Turns a Dated Event Into an Unknown Risk
Daniel Ellsberg showed in 1961, in the Quarterly Journal of Economics, that people prefer a bet with known odds to one with unknown odds even when the expected payoff is identical. Craig Fox and Amos Tversky extended the finding in 1995 and reported that the aversion appears mainly when a vague prospect is judged next to a clear one. A news calendar crowded with unresolved events supplies that comparison every morning.
Each item this week has a knowable range of outcomes. The Parliamentary Budget Officer, Annette Ryan, projects a $63.3-billion federal deficit for 2026-27. The Bank of Canada has a stated policy rate. Yet each event is experienced as a blank, and the felt cost of being wrong attaches to whoever acts just before the answer arrives.
The Largest Drops Did Not Wait for the Calendar
The S&P/TSX Composite recorded five daily moves beyond 1% in 24 sessions since September 28, yet finished the span 0.88% higher, and its sharpest decline came from technology rather than politics.
Daily percentage change in the S&P/TSX Composite close, September 29 to November 2. Moves beyond 1% fell on October 7, 9, 14, 15 and 30; the 1.74% decline on October 30 followed a record one-day drop in Alphabet shares. Source: YCharts.
On October 30 the index fell 629 points to 35,620.03, a 1.74% decline, as concern over AI-related valuations spread from United States markets. Alphabet had fallen more than 12% the previous day after reporting heavier cash burn, and Amazon fell 1.4% on weaker profit, BNN Bloomberg reported. BNN Bloomberg attributed the decline to technology and AI valuation concerns rather than to any political event.
Of the 24 sessions, 14 closed higher and 10 lower. The trough close of 35,041.86 on October 7 and the peak close of 36,324.99 on October 21 sit 3.66% apart, a range that would have rewarded neither the investor who acted before every event nor the one who froze until each passed.
Status Quo Bias Makes Waiting Feel Like Not Deciding
William Samuelson and Richard Zeckhauser documented in 1988, in the Journal of Risk and Uncertainty, that people disproportionately stick with the current option, and that the effect strengthens as the number of alternatives grows. Holding cash through an event feels like the default. It is an allocation, and it carries its own risk of missing the recovery.
Capital Group reports that the S&P 500 has averaged a 15.4% one-year price return after midterm elections since 1950, with no negative one-year return after any midterm through 2023. Bank of America puts the average 12-month gain at about 14%. The discomfort has a basis: Capital Group also finds that midterm years carry a median return standard deviation of nearly 16%, against 13% in other years, with volatility especially high in the months before Election Day.
Strung together, the dated events offer a reason to defer until December 9, which is 36 days away. The historical record is a base rate rather than a forecast, but it shows that the pull to wait is a documented bias and not a read on the market.