Windsor Wealth Management LLC

Investment service in Topsfield, Massachusetts

Elections and Your Investments, Stay the Course

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The presidential election is fast approaching.

Generally, elections create uncertainty and market volatility both before and after voting—no matter who wins. They also can cause investing anxiety.

Therefore, as a friendly reminder…

Stay the course, and remember our two key investing principles:

#1—Have a Plan, Play Your Plan

#2—Control What You Can Control

While short-term market fluctuations can be unpredictable (and uncomfortable), maintaining a long-term investment strategy has historically outperformed other approaches.

For example, let’s consider the following two charts:

CHART 1

Stocks have had a positive return in 83% of presidential election years, according to Hartford Funds research.

Elections and Investments

See Hartford Funds full analysis.

CHART 2

What happens after the next administration takes power?

The following chart created by Russell Investments, analyzes three scenarios to show how a $100,000 investment might perform in the first year and three years after an election.

Spoiler Alert: Remaining invested pays off.

Elections and Investments
Data source and analysis: Morningstar Direct. Time periods examined: 1977-1979, 1981-1983, 1985-1987, 1989-1991, 1993-1995, 1997-1999, 2001-2003, 2005-2007, 2009-2011, 2013-2015, 2017-2019. Equity: Ibbotson U.S. Equity Index (1975-1983), Russell 3000 Index (1984 – Present). Bonds: Ibbotson Intermediate Bond Index (1975-1985) linked to Bloomberg U.S. Aggregate Bond Index (1986-Present). Cash: Citigroup 1-3 Month T-Bill Index. Index returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment. Indexes are unmanaged and cannot be invested in directly. In USD.

While the future is uncertain, historically, staying invested has proven to pay off in the long run.

Election & Investing News (Be Skeptical)

There’s an amazing amount of election and investing news misinformation.

Therefore, we’re encouraging you to question the legitimacy of all news.

  • Consider the Source: Be aware of news outlets’ biases and agendas.
  • Check Multiple Sources: Verify what you’re being told.
  • Use Fact-Checking Resources: For example, Snopes is a fact-checking website that debunks rumors and hoaxes, and FactCheck.org fact checks politics.
  • Be Skeptical: Approach news with a critical eye; question everything you read.

Related: Speaking of being skeptical, in a recent client letter we discussed 12 Steps to Help Protect Yourself From Data Breaches. Being skeptical of all-things-digital ranks at the top to help protect your personal information.

Finally, if you’re experiencing increased anxiety due to the elections, taking a break from news and social media can often help settle you.

–David Bunker, Financial Advisor & Licensed Fiduciary

Before You Go

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