When Making Financial Decisions, Look Past Politics

MODERNIST’S ASSET CLASS INVESTING PORTFOLIOS ARE STRATEGICALLY INVESTED WITH A FOCUS ON LONG-TERM PERFORMANCE OBJECTIVES. PORTFOLIO ALLOCATIONS AND INVESTMENTS ARE NOT ADJUSTED IN RESPONSE TO MARKET NEWS OR ECONOMIC EVENTS; HOWEVER, OUR INVESTMENT COMMITTEE EVALUATES AND REPORTS ON MARKET AND ECONOMIC CONDITIONS TO PROVIDE OUR INVESTORS WITH PERSPECTIVE AND TO PUT PORTFOLIO PERFORMANCE IN PROPER CONTEXT.

When compared against your overall investment horizon, a single presidential term is relatively brief. A single election cycle barely registers as a blip on the radar. The emotions that come with these events, however, can be expansive, consuming, visceral.

Amid everything else that’s going on, we hope to put the campaign season between now and November into some financial perspective, because as the data shows, whoever is in the White House does not preordain doom or boom for stock returns.

Stock market performance, when grouped by presidential party, historically has favored a Democrat in office, but it doesn’t tell the whole story (remember, correlation is not causation). Though, the administration can certainly support or undermine our values, as we’re seeing today.

It is important to note that stocks were up the majority of the time, regardless of who was in office.

Even so, our political beliefs can color how we see the world around us – whichever party is in power – and so influence our investment decisions, often with less-than-ideal financial results.

The takeaway, of course, is that you are best served by looking past the upcoming election and focusing on the long term.