The holidays already feel like a distant memory and by now most have settled into their daily routines. But for many in the Midwest, I think 2020 will be anything but routine. The national election is coming this November.
Since we’re considered a swing state, I expect we will receive wave after wave of political advertisements, most with a negative slant toward the opposition. It’s likely that most voters already know which candidate they’re voting for, or said another way, voting against. That means a tremendous amount of advertising dollars is probably chasing after just a handful of voters.
During election years, I’m often asked for my political opinion, especially regarding presidential candidates. My role is not to promote blue or red political views, but rather to help keep my readers in the green. So the question becomes, “What does it take to be in the green?”
For most it means a prudent financial plan that includes a diversified portfolio. The plan may be tweaked or modified periodically, but it should never be abandoned because of the results at the ballot box.
I can still recall a retired educator calling me after the last national election and choosing to cash in all of her investments. She didn’t want to hear any of my thoughts or opinions. She was very insistent that the result of the election spelled doom for the investment world and that it would soon collapse.
As it turned out, her beliefs caused her to abandon her strategies and miss out on some incredible gains. To me, this was a clear case of letting her emotions over the election results cause her to ignore logic and abandon her planning.
There aren’t too many equity mutual funds that have an 85-year track record. But at least one that’s been around that long pointed out that it didn’t matter if a Democrat or Republican is in the White House, because at the end of every ten-year cycle, the investment results were positive.
Of course, historical performance doesn’t guarantee future results. But it does illustrate that we might read too much into who’s sitting in the Oval Office.
There’s no question the nation is divided politically and the rhetoric is harsh. I expect it to continue throughout 2020 and probably become even worse.
Presidents come and go, investments fluctuate wildly, international conflicts continually pop up, and Mother Nature constantly reminds us that weather can disrupt our lives. But are any of these reasons for rationalizing that you should avoid investing? I’ll give that a quick no! Because, if everyone waited for everything to be good in the world, nobody would ever invest.
Politicians can influence the investment world but they can’t control it. No matter who wins in November, roughly half the population will be unhappy.
Simply stated, elections come and go, but Wall Street and banks will be open for business no matter who wins. Investors need to look beyond elections because regardless of the outcome you still have bills to pay, kids to educate and retirements to fund.The ballot box is important, but your investment goals, dreams and aspirations are more important. So stay diversified, stick with your plan and it won’t matter who gets elected in November. You can still be a winner.