Spring 2024

I find it interesting to learn about people’s different preferences. Some people enjoy traveling, others don’t. Some people enjoy eating chicken tenders and some prefer hummus. Some people like to drink wine, others beer, and some neither. It’s all about your preferred tastes, preferences, what you know, what you don’t, what you like or dislike, or maybe just what you learned growing up.

I was a member of the clean plate club. You probably had a membership too, although I think the club will probably be extinct in about 40 years. In the clean plate club, you had to clean your plate (eat all your food) before you could leave the table. It wasn’t an option and was regardless of whether you liked the food or were hungry. I’m trying to end my membership with the clean plate club, but boy, once you belong, it is very difficult to cut ties.

People also have many of these strong affiliations to political parties. Sometimes it is the political party their parents belonged to and so that is what they learned growing up. Sometimes life events helped shape their current beliefs and subsequent political party. Whatever the case, once you belong, it is often difficult to cut ties or affiliation because it is what you know and believe.

Believe it or not, this is not a conversation about political parties. It is however an election year, and since we can all agree that people have different tastes in food and different beliefs and affiliations, I think we can also agree that we may have different thoughts on what happens when one party wins the presidential election versus the other. While I can’t speak to which is better or worse, I can discuss how this outcome effects the stock market.

It doesn’t. Well, it does, but it doesn’t. The reality is, that who the President of the United States is, and their respective political party is 1 of 100 things that influences the stock market. In fact, US Stocks have trended up regardless of whether a Republican or Democrat won the presidential election. Markets do tend to be more volatile early on in election years, but as they year goes on, they have historically tended to rise strongly after primary season. Moreover, investors who were fully invested or made monthly investments (like in your IRA, Roth IRA, or 401k) did better than those who stayed in cash out of fear and uncertainty. **

The bottom line is this: It is an election year. The market will have ups and downs. You will have thoughts and opinions about the election because this is America and that is who we are. The best thing for your investments, is to keep your eyes on your goals and objectives for the assets we are managing for you. When changes are warranted, we will give you our thoughts and recommendations and they will be what is best for you and your situation. Let us do the worrying for you and remember to Vote!

** Source: Capital Group Guide to Investing in an Election Year 2023, Marketing Support: The Advisor View, May 2023, July 2021, June 2020; Fund Intelligence, February 2020.