Avoiding Election Year Financial Worry
Every four years our screens get plastered with red and blue infographics hypothesizing the impact of every scenario and outcome. It gets overwhelming quickly and understandably drives many to disengage. Whether you are going to lean into the coverage for the upcoming months or have already hit your breaking point, the 25 Financial team wants to help simplify the information you are seeing about how the election cycle impacts the financial markets.
Historically, it has not mattered.
“It’s natural for investors to look for a connection between who wins the White House and which way stocks will go. But regardless of who wins, nearly a century of returns shows that stocks have trended upward.” 1
The same principles we have focused on when building our investing models apply, you cannot consistently out-predict the market. It is not a winning game to try.
“Shareholders are investing in companies, not a political party. And companies focus on serving their customers and helping their businesses grow, regardless of who is in the White House.” 2
There are plenty of things to lose sleep over in the world in 2024, but the impacts of the election on your portfolio is not one of them.
Vanguard 3
References
1 “The Market and US Presidential Elections.” Dimensional, 2024.
2 “Presidential Elections: What Do They Mean for Markets?” 28 Oct. 2020. https://www.dimensional.com/us-en/insights/presidential-elections-what-do-they-mean-for-markets
3 “Presidential Elections Matter but Not so Much When It Comes to Your Investments.” Vanguard, 26 Oct. 2023, investor.vanguard.com/investor-resources-education/article/presidential-elections-matter-but-not-so-much-when-it-comes-to-your-investments.
