Most analysts are tipping a clear win in the federal election will bolster the economy and reignite consumer confidence. But with the poll just days away, that prediction may be little more than wishful thinking.
Research from Goldman Sachs has dampened hopes of a post-election fillip on equity markets, saying that historically there is little evidence to support that theory.
Goldman strategist Tim Toohey said changes of government in the past had actually had the opposite effect, resulting in a period of slower, rather than accelerated, economic activity.
"The assumption that elections lower confidence and delay spending in the lead-up to the poll date is not supported by the economic data," Mr Toohey said.
"[And] we find little evidence to suggest that the passing of a federal election results in a surge in retail spending, confidence and asset prices.
"Typically, the $A declines, equity markets decline, bond yields rise, and the path of economic indicators is mixed in the months following the result."
Mr Toohey said in the past three elections in which there was a change in government, the equity market sold off 1.2 per cent a month before the poll, was 0.2 per cent in the week afterwards, down 0.9 per cent in the fortnight, and a month later was down 2 per cent.
In the case of the Australian dollar, Mr Toohey said a change of government had historically resulted in a 2.6 per cent fall in the week after the election and held onto those losses for the first month of the new regime.
Bond yields, meanwhile, have risen on average 4.2 per cent in the month afterwards.
Mr Toohey said it was possible there would be a lift in some measures of confidence but it would be mild.
He said it was unlikely that business conditions would recover without a broad-based recovery in consumer spending, adding that "slowing household income growth suggests a cautious consumer will persist. Recent easing in financial conditions and the rise of household wealth through 2012-13 will help, but the lags from both forces are long and in the interim they will have to navigate further fiscal drag."
But despite Mr Toohey's conclusion based on hard evidence, talk of happy days on the ASX after the poll is still swirling.
RBS Morgans chief economist Michael Knox said in a client note that regardless of who won the election, a clear result would boost the sharemarket.
"A look back at the last 30 years and 11 elections has seen the Australian stockmarket increase by 1.31 per cent each month on average in the three months following an election. That equates to an almost 4 per cent gain for the quarter immediately following an election," Mr Knox said.
"This increasing confidence acts like a reduction to the risk premium and is similar in its effect to an interest rate cut in that the flow-through to GDP has a lag of about five quarters. Therefore, we should see the more long-lasting result from an election outcome continuing on throughout 2014."
But Ig Markets strategist Evan Lucas agreed with Mr Toohey, saying whatever happened on Saturday it was unlikely that Monday morning would "see a scorched-earth or grass-is-greener moment".
Mr Lucas said the markets were more likely to react to global issues - the US Federal Reserve meeting on September 17-18, where it is widely tipped the central bank will agree to start winding back its $US85 billion-a-month stimulus; the German election on September 22; and the Syrian conflict.
"This election from a market perspective is a non-event," he said.