As in previous election years, investors are inundated with headlines and opinions regarding potential electoral outcomes and resulting implications for capital markets. This year, uncertainty regarding the potential health and economic impacts of a global pandemic has amplified the noise. Meanwhile, the ascent of social media has fanned the flames by all too often animating our biases rather than appealing to our reason. This election year, perhaps more than ever before, it is important that investors set their emotions aside, recommit to their objectives, and consider the data.
It’s natural for investors to look for a link between presidential politics and the direction of the stock market. While presidents can certainly impact markets, there are thousands of other factors that also have impact. Wise investors will also keep in mind that markets reflect investors’ expectations regarding all of these factors, including elections. Changing your investment allocation in anticipation of the election’s outcome is nothing more than a short-term bet against the collective wisdom of thousands of investors.
History makes clear that stocks have trended upward across administrations of both parties. Investors who are unnerved by media speculation would be wise to review their long-term goals, ensure their portfolio strategy is consistent with those objectives, and maintain an allocation appropriate to that end.
Also In this Issue:
Coping with College Costs: The Basics
Year-End Tax Considerations
The High Yield Dow Investment Strategy
Recent Market Statistics
Dow Jones Industrial Average Ranked By Yield
Asset Class Investment Vehicles