Dysfunctional Swamp 2024
This is very important: regardless of what your TV or the internet tell you, politics only play a small part in stock market movement. Stocks move based on millions of pieces of information, and politics represent only a small fraction of that data.
It can be maddening, because stock market returns are so random. As humans and investors, our brains crave some kind of “If X happens, then Y will occur” formula to try to explain how stocks move. It makes us feel better. But it doesn’t help us navigate the markets successfully.
Has it mattered if a Democrat or a Republican was in the White House? Not really. Witness the 2 charts below, which show growth over time in the stock market through decades of various White House occupants.
Source: Capital Group
In fact, company earnings are much more influential on stock prices than politics….
Source: Invesco
Don't let Washington sway your investment decisions. Many would agree that it has been a dysfunctional swamp of disappointment since 1789, and stocks have done well since.
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