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💰 How do elections affect markets?
Preston Victory
November 06, 2024
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Welcome, Future Early Retirees.
In the wake of the recent U.S. presidential election, many of us are reflecting on its implications not just for our political landscape but also for our financial futures. Today, I think it is important dive into why, despite the political turbulence, the stock market often remains steadfast, and how we can approach these times with a mindset of peace, love, and kindness.
In today’s newsletter:
Elections don’t affect returns
Over the years, people love to hype up the U.S. presidential elections having a big impact on your financial returns little to no long-term impact on the overall returns of the stock market. Here's why:
Policy Continuity: Many policies affecting economic growth are bipartisan or take time to get through Congress, preventing an individual candidate from completely changing things after each election..
Investor Confidence: Long-term investors tend to look past short-term political fluctuations towards broader economic trends and corporate fundamentals.
Historical Data: From elections dating back to the 1950s show that post-election market performance tends to average out over time, regardless of which party wins.
Embracing Unity in Diversity
While the election might conclude, the societal divide will not heal overnight. Here's why fostering peace, love, and kindness is crucial:
National Healing: After a heated election, extending a hand of friendship and understanding to those who supported the losing side can begin the process of national healing.
Promoting Dialogue: Encouraging open, respectful conversations about differing views can lead to greater empathy and lessens the 'us vs. them' mentality.
Mental Health: Reducing animosity can decrease stress and anxiety for many, promoting a healthier community environment.
Actionable Insights:
Stay Invested: As shown above, historical trends suggest that staying invested through election cycles can be beneficial. Avoid knee-jerk reactions to political news.
Spread Kindness: Engage in community activities that promote unity. Simple acts like volunteering, or even personal gestures towards those with differing political views, can bridge divides.
Educate Yourself: Understanding both sides of the political spectrum can not only enrich your perspective but also equip you to foster more constructive dialogues.
Plan for the Long Term: Remember that markets don’t react strongly to whoever is elected over the long-term. Tailor your investment strategy accordingly.
In closing, while the political landscape of our nation might shift with each election, the fundamental drivers of market performance tend to remain consistent. Let's use this time to not only secure our financial futures but also to enrich our social fabric with kindness and understanding.
Stay informed, stay kind, and as always, stay invested in both your community and your financial goals.
Thank you for reading!
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Things I Found Interesting
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Talk to you all next Wednesday 🙋♂️
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