Politics May Distract Investors

There are many reasons to vote but the stock market isn't one of them

Presidential elections are important but can often distract investors financially.

We're in the midst of a very polarizing election, and there are many important reasons to cast your vote tomorrow—but the stock market isn’t one of them.

This election, like past elections, has led to increased market volatility and heightened investor emotions. This is completely normal. Generally, reducing uncertainty tends to boost asset prices, but right now, we're dealing with peak uncertainty.

Market returns have varied under different presidential parties, but there’s no clear, consistent historical trend. While certain presidents may have coincided with stronger market performance, returns are influenced more by economic and business cycles than by which party is in power. Regardless of party, these cycles tend to be positive more often than not and that is why we encourage you to stay invested regardless of politics and invest based on your time horizon and financial goals.

EVERY single U.S. President since the year 1900 has presided over a recession, with the exceptions of Bill Clinton, LBJ and Joe Biden. In the case of the latter two, they weren't in office for two, full four year terms and Clinton was in office for the invention of the cell phone and the internet. Economic policies come and go while corporate executives and their boards work to grow profits for shareholders, regardless of who is in the White House.

Will this time be different? Maybe. Remember that there’s always a reason to sell and the investor is often to blame for poor results, not the market. Investing can often feel like an emotional roller coaster, but historically, the long-term trend has favored those who are patient, bringing growth over time.

When your friends start talking politics and portfolios, send them these charts. And after the election, we're here to help you plan and create a financial strategy for moving forward.

Please VOTE tomorrow, but for reasons other than the stock market.

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