by Tom Warburton
So, a buddy comes in… She inquires: “are you changing your recommendations to clients
because of the Presidential Election?” to which I replied, “Presuming a client has a Purposeful
Portfolio, we recommend modifying portfolio allocations when clients’ needs change and not
due to events in the news such as a Presidential Elections.”
We had a great conversation about current events and agreed: A person’s political beliefs are
important; as Americans, we are free to debate these ideas and support the candidate that we
think best aligns with our values and our idea of what the future should look like.
Do I believe that an investor is best suited by making investment decisions based on an
anticipated or actual outcome from an election? No. The data does suggest that the market
rewards patient investors during both Democratic and Republican governments.
Here’s some interesting data on the topic:
Markets have rewarded long-term investors under a variety of US Presidents, from both
parties.
Markets have also rewarded long-term investors during periods of time when
Republicans have full control of Congress, when Democrats have full control of
Congress, as well as during times of mixed control.
