As you are aware, 2024 is an election year. We receive lots of questions asking how the election will affect market outcomes. One of the most common questions I hear is, “will the markets go down in an election year?” I do not have a crystal ball, but I think it would be interesting to approach the question from a historical perspective. Past performance cannot predict future results but looking at historical data might help with long-term perspective. News cycles focus on short-term events, short-term fear, and short-term uncertainty. Investing is most often a long-term proposition, but we know investing in uncertain times is not easy. Investing involves risk and our brains are wired to worry about short-term risk which is often in conflict with the long-term rewards of staying the course. A sound financial plan along with a long-term view can help weather short-term uncertainty. History shows us that staying on the sidelines during an election year rarely pays off.
Does your money care who gets elected? This question is often centered around which political party will be better or worse for your investments. You might find it surprising to learn that your investments tend to care more about time in the market rather than a particular party in the White House.
