How Do Elections Affect the Market?
If you’re anxious about the election, you are not alone. Emotions run high in any election year, and this year is certainly no exception. Round-the-clock news coverage may make it easier to stay informed, but it can also make it significantly harder to determine what’s important or how to handle it. You already know that the presidential election has a major impact on things like foreign policy, but you may not know that it also has impacts the market – no matter who is on the ballot nor who wins. The market is driven by investor emotion, which is why you often see significant market volatility in election years, both before and after the election.
With only days to go until the election, you’ve likely seen many headlines speculating on how election results will affect various policies. However, just as it is impossible to perfectly time the market to increase your returns, it is impossible to predict definitively what the next four years will look like or how that might affect the market. What that means for you as an investor is that, while you cannot control the election results, you can control how you respond to them.
Second-guessing your investment strategy and worrying about market performance feels only natural, but it’s important not to let short-term market fluctuations influence how you approach your long-term goals. Successful investors are patient and make decisions based on their own goals, risk tolerance, and time horizon—not out of fear of current events.
As your financial professional, my role is to guide you along a journey to achieve your financial goals, regardless of who sits in Congress or the White House. If you are wondering how the upcoming election may affect your portfolio, please do not hesitate to contact me; I’d be happy to help. But remember that staying calm, staying disciplined, and staying the course are (always) key to achieving your financial goals.