We’re less than three months away from midterm elections, and since nothing inspires people to make terrible investment decisions like their political beliefs, here are some preemptive charts to remind you that the market probably won’t collapse if your preferred candidates don’t win.
First up, volatility around the midterms is normal, and the third quarter has historically been among the weakest.
But that doesn’t mean you should sell.
If you had sold after the first quarter of this year anticipating a bad 2Q, you missed more than 17% of upside in the S&P 500. I just bring it up as a reminder that it would be historically normal for the market to trend down before trending back up.
Second, the strategy should not change based on who you think will win.
Roughly 50% of the time, your preferred party is not in power, and I suspect it will always be that way.
Since 1926, the stock market has trended higher regardless of which party has been in office.
And if you only invested when your preferred party held the presidency, you’d be notably worse off.
It is easy to feel that this midterm election and this moment in history are different. But the world rarely ends, and the best investment strategy is generally the one you can stick with regardless of who is in office.
Need to Shred Things?
If you’re in the Houston area and have documents to be shredded, feel free to bring them to our office.
You can bring them with you if you attend our seminar on September 17th; you can bring them with you if you have an account review; or, if you just want to bring them up at another time, you can block off time using the link below, and we’ll make sure we’re ready for you.
https://calendly.com/cmckeon-tsawm/15min
Personal Note:
Summer is over, and my kids went back to school this week.
They are now 3rd-, 6th-, and 8th-graders.
Jon - That is so very true regarding whom is in power & the market. Very insightful & informative- Thanks
Thank you
Best