I’ve been getting asked if people should be making changes to their portfolio in anticipation of the upcoming election.
In case you don’t want to read any further, the short answer is no.
Who is going to get elected?
It seems like everyone is worried about how the results of this election will impact their investments. But here’s the secret, someone voting for the other party is thinking the same exact thing as you, “If my party doesn’t get into office things are going to be terrible!”.
So, does a certain candidate getting elected actually have an impact on the stock markets? In reality, no it doesn’t.
NO impact
Here is a chart that shows the growth of the S&P 500 since 1926. As you might notice, it has been going up regardless of who is in office. Yes, there are dips here and there but that is just normal market cycles at work, not the President.
Now, keep in mind that there will be volatility in the markets for a short period but this is driven because of uncertainty (which the people and markets hate) rather than who is in office.
Don’t let short-term volatility derail your investment strategy though. You likely have years, if not decades, left to invest and it’s important to keep that long-term perspective in mind.