Navigating Election Year: Thoughtful Investment Strategies for Uncertain Times
As the 2024 U.S. presidential election approaches, investors are curious about how the uncertainty might affect the markets. However, from what I have observed data and market trends suggest that election cycles may impact financial markets less than commonly assumed. Here are 3 key takeaways for investors navigating the pre-election uncertainty and beyond:
1. Does political party matter?
U.S. stocks have consistently risen regardless of which party holds the White House. Since 1926, amid repeated shifts in the political landscape, the S&P 500 has produced cumulative returns of 1,456,754%. Stocks have continued to rise regardless of which party holds the presidency. (Growth of $1k, 1/1/26 – 12/31/23)
The market's political neutrality is also apparent over shorter timeframes: those who stayed invested performed much better than those who only invested when one party was in control. This confidence-boosting fact underscores the importance of staying invested, regardless of the political landscape. Making portfolio changes based on political beliefs has historically led to underperformance compared to focusing on the long term and staying invested.
2. Long-term focus
Investors should consider focusing on economic and market fundamentals and stick to their long-term financial plans rather than being swayed by the emotional ups and downs of the election cycle. Historical data shows that financial markets have been largely unaffected by presidential and midterm elections. The impact of election cycles on long-term investments is not well-supported by market history, so adhere to a thoughtful asset allocation based on your goals and personal risk tolerance.
3. Don't overreact to campaign promises
It is important not to rely too heavily on candidates' campaign promises during the upcoming election. There is a significant disparity between these promises and actual policy changes, emphasizing the potential risks of basing investment decisions solely on campaign proposals.
It's critical to keep your long-term investment goals in mind despite the strong emotions that politics can bring. I believe that the economy will continue to be the main driver of the markets. While there are risks from factors such as inflation and geopolitics, I’m optimistic that there will be ample opportunities for multi-asset class investors. Your Savvy Advisors team is ready to help you navigate the changing landscape and build a portfolio that is designed to help withstand various economic cycles and elections.
Meet
Brian Boswell
Hi there! 👋🏼 I'm Brian, I specialize in investment management and custom tailored financial planning for physicians. Drawing on my firsthand understanding of the challenges faced by physicians, I offer guidance on protecting your assets, minimizing taxes, and preparing for the future.
All advisory services are offered through Savvy Advisors, Inc. (“Savvy Advisors”), an investment advisor registered with the Securities and Exchange Commission (“SEC”). The views and opinions expressed herein are those of the speakers and authors and do not necessarily reflect the views or positions of Savvy Advisors. Information contained herein has been obtained from sources believed to be reliable but are not assured as to accuracy.
Navigating Election Year: Thoughtful Investment Strategies for Uncertain Times
As the 2024 U.S. presidential election approaches, investors are curious about how the uncertainty might affect the markets. However, from what I have observed data and market trends suggest that election cycles may impact financial markets less than commonly assumed. Here are 3 key takeaways for investors navigating the pre-election uncertainty and beyond:
1. Does political party matter?
U.S. stocks have consistently risen regardless of which party holds the White House. Since 1926, amid repeated shifts in the political landscape, the S&P 500 has produced cumulative returns of 1,456,754%. Stocks have continued to rise regardless of which party holds the presidency. (Growth of $1k, 1/1/26 – 12/31/23)
The market's political neutrality is also apparent over shorter timeframes: those who stayed invested performed much better than those who only invested when one party was in control. This confidence-boosting fact underscores the importance of staying invested, regardless of the political landscape. Making portfolio changes based on political beliefs has historically led to underperformance compared to focusing on the long term and staying invested.
2. Long-term focus
Investors should consider focusing on economic and market fundamentals and stick to their long-term financial plans rather than being swayed by the emotional ups and downs of the election cycle. Historical data shows that financial markets have been largely unaffected by presidential and midterm elections. The impact of election cycles on long-term investments is not well-supported by market history, so adhere to a thoughtful asset allocation based on your goals and personal risk tolerance.
3. Don't overreact to campaign promises
It is important not to rely too heavily on candidates' campaign promises during the upcoming election. There is a significant disparity between these promises and actual policy changes, emphasizing the potential risks of basing investment decisions solely on campaign proposals.
It's critical to keep your long-term investment goals in mind despite the strong emotions that politics can bring. I believe that the economy will continue to be the main driver of the markets. While there are risks from factors such as inflation and geopolitics, I’m optimistic that there will be ample opportunities for multi-asset class investors. Your Savvy Advisors team is ready to help you navigate the changing landscape and build a portfolio that is designed to help withstand various economic cycles and elections.
Meet
Brian Boswell
Hi there! 👋🏼 I'm Brian, I specialize in investment management and custom tailored financial planning for physicians. Drawing on my firsthand understanding of the challenges faced by physicians, I offer guidance on protecting your assets, minimizing taxes, and preparing for the future.
All advisory services are offered through Savvy Advisors, Inc. (“Savvy Advisors”), an investment advisor registered with the Securities and Exchange Commission (“SEC”). The views and opinions expressed herein are those of the speakers and authors and do not necessarily reflect the views or positions of Savvy Advisors. Information contained herein has been obtained from sources believed to be reliable but are not assured as to accuracy.
