Happy Election Day,
As you know, today is an important day. Some of you may be more excited than others to cast your vote, but this is a chance for each of us to express our views.
We don’t want to minimize the impact this election will have on our future, but we would like to try to assuage fears you may have as we await today’s results. It’s important to remember that while a presidential election undoubtedly affects Wall Street, it is just one of many factors determining market performance. What really drives performance in the markets is not the presidential election, but rather the overall macro economy. Undoubtedly, this election will have lasting ramifications. However, at this time, the country is quite divided and the executive branch does have checks and balances from the legislative and judicial branches of our government.
Remember, we are investors, not traders. Just like we aren’t going to panic and make rash decisions due to short-term market volatility, we aren’t going to panic and make rash decisions based on who gets elected. This is something we have discussed in the past. While we will likely experience market volatility based on these results, it has been a volatile year overall and we expect that to continue. The careful diversification of your portfolio has been designed to cushion the effects of any short-term market volatility. If we should get a stock market correction triggered by this election, we will be quick to assess the situation and perhaps be looking at this as a buying opportunity. If we are patient, we will be rewarded.
When it comes to the performance of your portfolio, history shows that it doesn’t matter much which party was in the White House. Looking back to 1900, whether a Democrat or Republican occupies the White House, there has been no statistically significant impact on U.S. equity markets. We anticipate a continued lack of cooperation in our government.