Election Fears
Election Fears
Political season is always horrible - the countless ads, the constant bickering and lying, partisanship, and the horrific takeover of all social media outlets by more ads, and crazed internet trolls. Maybe it’s the reason that I’m just not that active on Facebook anymore… None of it is productive. None of it makes the country better. None of it solves the problems that we face as a nation. I’m so tired of choosing between the lesser of two evils, why can’t we just have candidates for local and federal offices that are good people?!?!
No matter which side of the aisle you fall on, the upcoming presidential election feels like a pivotal moment for the country. I won’t say that it isn’t, what I will say, is that it should NOT be a pivotal moment for your investments. The lead up to, or outcome, of an election should have no bearing on your financial plan. Many people want to sit in cash until they see what happens. Do not make decisions for long term investments based on short term conditions! Do not fall into the trap of thinking that if your candidate does not get elected, that the whole world will come crashing down around you. Have a plan. Have a strategy that you follow, and follow through. Do not have regrets because you should or shouldn’t have done something. Follow your process. Your process should not be to do nothing, ever.
Investing in an election year should not be special, it’s just a Tuesday as far as your long-term goals are concerned. The stock market does not play politics. It does not favor Democrats over Republicans. Presidents from both parties have enjoyed record highs in the S&P 500. (What they should probably stop doing is try to take credit for it, and then turn around and push the blame on whatever is convenient when the tide turns.) The historic numbers, back to 1936 tell us that it doesn’t matter who is in office. The market’s trend is upward. There may be some down years, but the prices have yet to stop rising in almost any ten-year period. In fact, if you had invested in any election year, with any president (with one exception), your investment would have been positive 10 years later if you had invested in the S&P 500. There was no advantage based on which party was elected!
Have a financial plan in place. Follow your plan. In addition to illuminating your current investments and goals, your plan should identify investment strategies that you follow. These should align with your risk tolerance and time horizon. The strategies will dictate a consistent process that you follow when considering when to invest, and how much. In order to meet your goals, you have to follow the plan. Any deviation because you are worried about politics will derail your plan. If the plan is not followed you are risking your future, and being able to achieve your goals. If your plan does not provide the guidance that you need to feel confident during these tumultuous times - call me, you need a better plan.