The anticipation building up to elections often brings with it questions about how financial markets will respond. But the outcome of an election is only one of many inputs to the market.
When you click on the image below, an interactive document will open that examines market and economic data for nearly 100 years of US presidential terms and shows a consistent upward march for US equities regardless of the administration in place.
This is an important lesson on the benefits of a long-term investment approach.
How to weather 2020 and beyond with your investments?
Keeping an eye on which sectors are most likely to be affected by the presidential election (like healthcare and technology) is smart. But there’s no need to panic about market volatility during election season. Increased volatility has become more woven into the investing landscape even without the upcoming election — and that it might not necessarily spell bad news, especially when the economy is otherwise sound.
While the drama of this presidential election can make your imagination run wild, the best rule of thumb may simply be to stay invested in a globally diversified portfolio to continue to capture the expected returns from investing in a risky asset.
We believe one of the best ways to grow your wealth is to invest in profitable businesses, and that is the goal of our portfolios at Providend. All this of course is done in the context of your financial plan, which incorporates your long-term goals and your risk appetite.
For more related resources, check out:
1. Realistically Speed Up Your Financial Independence (for the Affluent) by Improving One Thing
2. Stay Invested for The Long Term? Think Again!
3. Lump Sum vs Dollar Cost Averaging Strategy
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