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Perplexed by Presidential Politics? – Payne Capital Management
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Perplexed by Presidential Politics?

Perplexed by Presidential Politics?

 

By Michelle McKinnon, Financial Advisor

These days everybody is talking about the upcoming Presidential Election in November. Every time you turn on the news, it’s all about Hillary Clinton, Donald Trump, and who’s going to get elected. I’ve fielded many questions from clients who are really nervous about how the markets will react to the election. I’ve also spoken with a lot of friends and colleagues who have chosen to wait on the sidelines because they want to put the election in the past before investing.

 

Three Keys:
1

Many potential investors are concerned by market reactions to the Presidential Election

But historically the President has actually had little impact on market performance

Stay invested because day-to-day fluctuations often don’t reflect long-term market trends

Well, here’s the issue. If you’ve been sitting on cash waiting for the election to pass, particularly this year, you’ve missed quite a move. At the time of writing this article, Emerging markets are up over 16 percent, energy markets 15-25 percent, commodities more than 11 percent, and real estate over 12 percent just in the past couple of months.

One thing we do know about elections is that, yes, some type of volatility typically comes with them because markets hate uncertainty. However, it’s often only for the short-term. From a long-term perspective, the President of the United States has little to do with how the markets react. Walmart, Johnson & Johnson, and all the other significant corporations are still going to open their doors the day after the election. They’ll continue to sell products and create profits.

So the President doesn’t really control the market. And although there will likely be volatility, maybe we should actually take advantage of that by adding more money to the market. I’m always saying buy low and sell high. But the takeaway message here is to stop being so consumed by day-to-day fluctuations. Turn off those TVs, stop reading all of the “financial pornography” as we call it in our office, and remember it’s about the long-term. Because from that perspective, markets will eventually go higher as they always have for the past 200 years.

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IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Payne Capital Management, LLC), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Payne Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Payne Capital Management, LLC is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Payne Capital Management, LLC’s current written disclosure statement discussing our advisory services and fees is available for review upon request.