There’s an old saying that “All politics is local,” which means regardless of the scope of the issue – national or global – voters form their opinions and make their choices based on how they will be personally impacted by the outcome. That’s certainly true when it comes to voters and the economy.
This election year might impact your retirement, and it might not be for the reasons you think why. Looking back at the eighth and final years of two-term presidencies going back to 1928, stocks have actually lost an average 4%. With a new president and new leadership comes new government policies, and this is the type of uncertainty that can contribute to investor jitters.
Related: When Washington Meets Wall Street
We can only encourage you to stay the course. While many investors get nervous from seeing their retirement accounts fluctuate, your financial advisor should be steering you to prepare for the volatility.
During an election year, there are three questions you might consider asking your advisor to help you evaluate if you are prepared for any changes, big or small, that might occur during this election cycle:
- Is my portfolio adequately positioned against market volatility?
- How would a more sustained downturn in the markets affect my retirement savings?
- How should developments in the daily news affect my investment decisions?
No matter what happens politically, big trends, like emerging markets and growth in the technology sector, will have a significant economic impact. No matter who is in the White House, it’s important to follow these trends.
Overall, there’s no magic chart or data analysis that can accurately predict what might happen with a financial market during an election year. However, the trends can give some insight, and understanding patterns in economic cycles can help us prepare. You can review the data and draw your own conclusions.
Learn more about this topic by downloading our eBook, “How This Presidential Election Will Impact Your Investments.”
Disclosure: This information is provided to you as a resource for informational purposes only. It is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax or investment advisor before making any investment/tax/estate/financial planning considerations or decisions