Worried About the Election?
Elections certainly matter, but for the long-term investor, we need to take caution in assigning too much weight to the effects on our investments. A review of historical market returns indicates that Presidency might not matter as much as we think for our Portfolio. As illustrated below, investment returns are impartial to which political party occupies the White House.
It is instructive to note that the above chart includes World War (both the Hot and Cold varieties), Presidential Assassination attempts, Oil shocks, Inflation spikes, Acts of Terrorism and Pandemics.
Despite any anxiety that precedes elections, the outcome has been that the American economy and the “market” continue to forge ahead. This is where we need to pause and give credit to the Framers of our Constitution for setting the foundations of a free economy that operates largely without interference. This allows that “Invisible Hand” as Adam Smith described it, to continue maneuvering with the full advantage of our rights, knowledge, skills, creativity, and work ethic.
As your Investment Advisor, we do not invest in Rs or Ds, Blues or Reds, or Rights or Lefts. We are selecting high quality, diversified investments and planning for long-term returns while our economy continues to be the greatest source of productivity and wealth generation in human history.
Whatever the concern, we advise patience and confidence that the sum of the parts of our economy are greater than any one person or party.
Please reach out to your team with questions, as we are always here to help.