I hope that you and your loved ones are continuing to do well. Just after the Democratic and Republican National Conventions in August, I used the “From the Desk of Todd” article to address client concerns about the upcoming presidential election and whether to expect any potential impacts to portfolios. In that article, you may recall, I stressed that the markets are more dependent on the outlook of the economy rather than the outcome of an election, and that historically, the markets generally do about equally as well under either party in the White House. I continue to stress that sentiment with our clients and heading into the homestretch of the 2020 presidential elections, I wanted to share two useful resources below.
Thinking of Changing Your Portfolio Because of the Election? Think Again
The volatility of last March and April is still fresh in many minds and it’s only natural to be concerned about additional market volatility that any significant change, like an election, may bring. To help provide some historical perspective about market performance leading up to past elections and immediately following past elections, I’ve included a graph from Hartford Funds demonstrating primarily gains during each period. To read the entire article, “Thinking of Changing Your Portfolio Because of the Election? Think Again,” click here.
Market Performance Tends to Be Positive 3 Months Before and After Presidential Elections
S&P 500 Index (% Returns)
Source: Morningstar, 9/20. Past performance does not guarantee future results. The Index is unmanaged and not available for direct investment. For illustrative purposes only.
There are some notable exceptions. In 2008, the market sold off sharply due to the Global Financial Crisis. And in 2000, the market sold off by 4.1% from Election Day until December 12, when the Supreme Court handed down its ruling in the contested election between George W. Bush and Al Gore (Morningstar, 9/20).
8 Themes to Watch for in the 2020 Election
Raymond James Washington Policy Analyst, Ed Mills, provides easy-to-digest themes in the infographic below including some potential economic policy changes. Although policies may ultimately affect the economy down the line, the infographic is a reminder to investors to “keep any D.C.-driven volatility in perspective.”
At PFG, our financial planning strategy always concentrates on investing for the long-term. We anticipate ups and downs in the market and focus on selecting the right allocations for market changes throughout the life of your portfolio. Financial plans work best when we meet regularly, discuss changes that occur in your life and make adjustments accordingly. Please do not hesitate to reach out, particularly if it’s been a while since we’ve met.
We’re continuing to meet with clients virtually and scheduling an appointment with me can easily be done online or by calling 301.595.8600.
Todd M. Wike, CFP®
*This investment strategy may result in investment returns that may be lower or higher than if decisions were based solely on investment considerations and could result in either underperformance or outperformance of the market as a whole.
The information contained in this material does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Todd Wike or Deborah Kelly and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor’s results will vary. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. Raymond James is not affiliated with and does not endorse the services or opinions of the various podcasts or applications discussed in this material. *The ranking may not be representative of any one client’s experience, is not an endorsement, and is not indicative of advisors future performance. No fee is paid in exchange for this award/rating. Chairman’s Council Membership is based on prior fiscal year production. Re-qualification is required annually.