The Market Doesn't Care for Election Politics & Don't Sell In May
It’s the time of year (and presidential cycle) where two common investment irrationalities surface: “I’ll wait until the election is over and then I’ll invest” and “sell in May and go away”.
Let’s address the first – an election year. Depending on what side of the aisle you’re on, you may have more or less concern when election season arrives. To speak plainly, it doesn’t matter when it comes to your investments. In fact, waiting to invest can hinder your long term financial planning goals and investment returns.
The chart below, from our research provider at Nasdaq Dorsey Wright, shows us that market performance in the election year outpaces years 1 and 2 of the presidential term. History tells us that “waiting it out” is not prudent. Investing is emotional. We encourage you to use historical data to quell those emotions. Think long-term.
Source: Nasdaq Dorsey Wright
The other phrase we hear is “sell in May and go away”. Again, a bad idea. The graph below speaks for itself. Election year returns for the summer are in fact stronger than non-election years – defying the Sell in May adage.
Yet, you will continue to see financial media regurgitate these fear mongering headlines. Fear sells. Ignore the media, focus on the data.
Glacier Advisors partners with clients to create lasting wealth by implementing a systematic investment process centered around your financial goals. We have found this leads to the best outcomes for investors.
Any opinions are those of Scott Miller and Brett Miller, CFA, CFP® and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. The information contained in this material does not purport to be a complete description of the securities, markets, or developments referred to in this material. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Past performance may not be indicative of future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
