Last month, election season was officially kicked off with the Republican and Democratic National Conventions. With less than two months to go, it's obvious to see the intense polarization in politics right now, complicated by Covid-19 and the social issues causing further discord and separation in our country.
So far, nothing about 2020 has seemed very "normal", and I think its safe to say we can probably expect that the next couple of months will continue to have their ups and downs. But market volatility in the months leading up to an election is nothing new. The market hates uncertainty as much as we do!
What I want to remind you of, is that even with all the volatility brought during election years, since 1928 there have only been 4 election years that have ended with a negative return in the markets. 19 out of 23 have been positive!1
The past is no guarantee of the future, but certainly goes to show that when it comes to election years, volatility is most often not the end of the story.
In the coming months, we will all be trying to keep up with what's going on in the election via news media. Its important to remember the tactics used by the media to get viewers and followers - the more unsettling and ominous the headline, the more clicks and views they get. Shock value and negativity are more attention grabbing than facts. This also contributes to stress and panic about the future of our economy and your investments.
So my advice in preparation for the next couple of months is two part:
1. If you're going to watch the news, take it with a grain of salt. Better yet, tune out! (At least periodically). While staying up-to-date is important, over-consumption of negative news is toxic to your mental (and physical!)2 health.
2. Focus on what you can control. While you can't control the markets, you can control how well you are prepared to handle volatility. Remember that when we started building your financial plan together, we assessed your tolerance for risk and how much volatility you are willing to endure for long term results. From this, we crafted an investment strategy built to withstand the ups and downs of life, including Covid-19, this 2020 election, and many more elections to come.
As always, I am here for you with any questions or concerns you may have in the coming months. If you are feeling uncertain at any point, let's have a conversation! I am happy to meet with you in person, over the phone, or via Zoom.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.