Remaining Focused on Your Goals
As the upcoming presidential election draws closer, it seems that everywhere we turn, political headlines are fighting for our attention. It can get “noisy” and confusing, especially when sensational soundbites get the most traction and can wind up taking on a life of their own. When the general political atmosphere starts becoming charged with emotion, it can leave even the most levelheaded person feeling anxious about the impact an election may have on the future of their investments. While feelings of uncertainty are understandable, it’s important to remember that although elections are significant, they are just one of many factors influencing the financial markets.
Three Key Points to Remember During the Presidential Election
- Markets have historically demonstrated remarkable strength and resilience during election cycles. Regardless of who wins an election, and even through times of highly polarized political environments, the S&P has gained value over the long term. Dating back to 1961, the S&P only posted a negative return during two presidencies, and there were other major economic factors involved at the time which included a recession, the burst of the dotcom bubble, and the global financial crisis.
- It is important to remain focused on fundamentals, stay diversified, and stay invested. Based on data since 1947, election year versus non-election year return patterns are random. At Frisch Financial Group, we make decisions about your investments based on economic fundamentals, not politics. Your best interests are always our top priority, and you can rest assured that we use informed, educated strategies to keep you on a path toward achieving your long term financial goals
- Economic policies matter more than political talk. During an election, it’s easy to get swept up in bold statements and campaign promises. These are often designed to grab attention and rally supporters, not to reflect policies that will necessarily be implemented. In reality, economic policies tend to be more measured and must pass through multiple checks and balances before taking effect. What truly impacts the markets are the policies that actually get implemented, particularly those affecting taxation, regulation, trade, and government spending. For instance, corporate tax rates, infrastructure spending, and trade agreements can significantly influence specific sectors and the broader economy. So, while campaign rhetoric can be alarming, it’s the actual economic policies enacted after the election that matter most for the markets and your financial plan over the long term.
Post Election Stability: A Return to Normalcy
History shows that once the campaigning is over and a president has been elected, the markets often stabilize regardless of which candidate won. Since 1952, the S&P 500 was up over 2% on average two months after Election Day. As the new administration’s policies become clearer, Frisch Financial will be watching closely and will continue to assess any potential impacts to investment portfolios. As always, if we feel that any changes are warranted, those decisions will be based on facts.
As we get further along in this election season, it’s natural to feel a sense of uncertainty. However, by keeping a balanced perspective on the hype, remaining focused on long-term goals, and staying the course with a solid financial plan, it’s possible to successfully navigate this period of time with confidence. If you have any questions, please feel free to contact us.
