We hope you are well and getting back into some sort of normalcy. Some of you have kids or grandkids back in school. Others have begun virtual learning. Regardless of your circumstances, we hope you are remaining connected to friends and family as we all need each other during this time.
We are approximately two months away now from casting our Presidential ballots. And like all election years, fear can reign regardless of which candidate you support. Emotions run high. Feelings can be hurt. And you are forced as an investor to make decisions in regards to your portfolio.
We thought it would be helpful to bring in some facts and data in regards to investing to help counterbalance the emotions. You might be surprised as to what you see.
We Have Been Here Before
I know, I know: “This time it’s different.” Well true – It’s always a little different. But I’d like to share what is not different:
Yes, I could go on. But I think you’d agree that these actions typically are represented in election years. So how do you block out the noise and see the truth as investors? You find the true data.
Please click on this link from Capital Group, one of our investment partners. Check out the first graph which shows the rate of return of the S&P 500 Index going back to March 4, 1933. The colors represent a Democratic or Republican Presidency.
Do you see the trend? “Markets have tended to power through presidential elections – with some volatility along the way – regardless of whether a Democrat or Republican won the White House.”
Please hear me clearly: Your vote matters. What I’m pointing out though is that for long-term investors, they have generally fared well regardless of the political party in charge.
Have a Plan. Revisit the Plan. Update the Plan.
Those who have a plan do far better than those who don’t. Even more, those who revisit their plan and make any necessary changes do even better! This has certainly been our experience as financial planners working alongside our clients. This process helps us see the big picture and reminds us of why we invest for the long-term.
“By design, elections have winners and losers, but the real winners have been investors who stayed the course and avoided the temptation to time the market.” – Capital Group article
We are here to listen and help should you like to discuss your specific situation. We understand these times can produce uncertainty and fear. We are ready to engage in these conversations with you.
*For financial planning clients of Rivertree Financial Planning: Please contact us as soon as possible if you have had any changes in circumstances, objectives, goals or risk tolerance.
Scott is the founder and a partner at Rivertree Financial Planning. Scott and his wife Helen currently reside in Jackson, MS with their three children Artur, Taylor, and Molly. They are members of Redeemer Church, PCA in Jackson.