It's The End of The World As We Know It

I got your attention, didn’t I?

No, I haven’t lost my mind, and I haven’t turned into a doomsday investment newsletter author trying to sell you their solution for the world ending (spoiler: It’s almost always gold).

I consider myself lucky that when I was in high school, I was a golfer that turned into a gym rat. Knowing my way around a golf course continues to be a great way to build relationships with people, and I’d like to think I continue to reap the benefits of consistent exercise. I like to start my weekdays in the gym before most of the world wakes up.

During one of my workouts last week, I was reflecting on some of my children’s athletic pursuits thinking how it would be great to have them join me in the gym when they’re of the appropriate age. Specifically, I was thinking about my two sons because I’m the assistant coach to their flag football team (I played golf in high school. Not football. Don’t ask about our record). My thoughts went something like this:

“Most experts say 12-13 years old is when kids can start lifting weights. Sully turns 8 this year, so that’s 4 years away. That’s one presidential term. At the next election maybe some of them can workout with me. Well, that’s assuming the world doesn’t end before then.”

I literally laughed out loud as I thought the last part, and this attracted more attention than I would have liked from other gym goers that morning. I probably thought it because my gym has several walls of TVs displaying a wide variety of networks with the early morning news shows. I’m sure at least one of them was broadcasting a reason for why the world was going to end that day - or in several weeks - if the outcome of the presidential election doesn’t align with that network’s political leanings.

I’ve been asked by several clients what I think will happen in this election, and my answer has been the same. I don’t know who will win. All the polling says it’s probably too close to call right now.

However, I’m confident as your financial advisor that we can’t allow our political opinions to impact your investment portfolio. It can be an extremely expensive mistake. I came across some interesting data from Bespoke Investment Group which illustrates this.

Let’s go back to 1953 – the beginning of Dwight D. Eisenhower’s presidency - and assume you’re a Democrat. You have $1,000 to invest, you’re investing in the S&P 500 Index, and you only hold this investment when a Democrat is the president. Today, your investment portfolio is worth roughly $61,800.

Now, let’s pretend you’re a Republican. You have the same $1,000 to invest, invest the money in the S&P 500 Index, and you only hold this investment during Republican presidents during that same period. Your portfolio is worth roughly $27,400

Before anyone gets excited, I’m not suggesting one party is better than another for your portfolio!

Let’s try this same analysis for the person that is apathetic towards which party controls the White House. They invest $1,000 into the S&P 500 in 1953 and never sell regardless of who wins each election. Investing $1,000 in the S&P 500 at the start of Eisenhower’s administration would be worth roughly $1,690,000 today.

We all have political opinions, but we can’t allow these opinions to disrupt a long-term investment strategy constructed around your goals.

We have a little over a month until this election is decided (thank goodness). I’m going to do my best to mute the TV and avoid social media feeds. I’ll cast my vote in November, and I hope you will do the same. The outcome will be what it is.

I bet the sun rises on Wednesday, November 6, regardless of who wins. In the meantime, people on TV and the internet will continue screaming the end of the world is coming.

It may be the end of the world as we know it, but I’ve decided – and I hope you do too – that I feel fine.

Ps. Kudos to anyone who picked up on my R.E.M. song reference. The song was released in 1987. I felt old when I looked that up.

Disclosures:
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Michael Anania and not necessarily those of Raymond James.