Election Hysteria

LT Site Icon

In a couple of weeks, our friends down south will take to the polling stations to determine the future of their country. American and Canadian investors alike will be watching closely. Many will speculate and many will be burned as the financial markets adapt to the outcome.
 
To avoid being burned, you must make informed decisions and in order to make informed decisions, it is critical that you approach the election with the right mindset.
 

Key Things To Remember:

1) Try your best to remove political expectations from your investment decisions. 
2) Do not try to predict market movements during the US election. 
3) Remember that the stock market goes up on average over time, no matter which party is in power. 
 

How Do Markets Perform During Election Years?

According to a report by First Trust Portfolios using data pulled from Morningstar, the market has been positive overall in 19 of the last 23 election years from 1928 to 2016, only showing negative returns four times.
Year Return Candidates
1928 43.6% Hoover vs. Smith
1932 -8.2% Roosevelt vs. Hoover
1936 33.9% Roosevelt vs. Landon
1940 -9.8% Roosevelt vs. Willkie
1944 19.7% Roosevelt vs. Dewey
1948 5.5% Truman vs. Dewey
1952 18.4% Eisenhower vs. Stevenson
1956 6.6% Eisenhower vs. Stevenson
1960 0.50% Kennedy vs. Nixon
1964 16.5% Johnson vs. Goldwater
1968 11.1% Nixon vs. Humphrey
1972 19.0% Nixon vs. McGovern
1976 23.8% Carter vs. Ford
1980 32.4% Reagan vs. Carter
1984 6.3% Reagan vs. Mondale
1988 16.8% Bush vs. Dukakis
1992 7.6% Clinton vs. Bush
1996 23.0% Clinton vs. Dole
2000 -9.1% Bush vs. Gore
2004 10.9% Bush vs. Kerry
2008 -37.0% Obama vs. McCain
2012 16.0% Obama vs. Romney
2016 12.0% Trump vs. Clinton

Data Source: Morningstar

 

How Do Markets Perform Under Different Administrations?

Markets tend to do well under all administrations with slight variances. Ben Carlson CFA, a prominent wealth blogger shared this chart in a recent blog post highlighting long-run returns. The chart shows how $1 would have grown over time under various political environments.

Investment Returns By President

 

How To Manage Your Investments During An Election Year

Should you make changes to your asset allocation during an election year or after a new president is elected? Probably not. Focusing on what you can control is key when investing for the long-term. Even if the market is caught off-guard by the election results (as evidenced in 2016 when President Trump won), the shock will likely be temporary. It can be hard, but it’s really important not to allow personal feelings about politics interfere with your financial plan.

The Information 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. 

Read The Full Commentary

If you do not have access to our monthly email, you can request it here:

Your privacy is fully protected. By filling out this form to request this month’s commentary, you give explicit permission for LT Wealth Management Partners to email you to deliver our e-newsletter. It is important to note that your consent acknowledges agreeing to receive our newsletter knowing that your name and email may be stored on external servers outside of Canada. 

Share on facebook
Share on twitter
Share on linkedin
Share on email
Investment Solutions

Are You an Emotional Investor?

Humans have a powerfully instinctive drive to over anticipate and overreact. When it comes to investing for retirement, reigning in that desire to react can often be a major challenge.

Read More »

Looking to build sustainable, long-term wealth?

We can help.

(604) - 416 - 2505

LTwealth@raymondjames.ca

555 Burrard St, Vancouver BC

Article Disclaimer:

Links provided to other internet sites are for the convenience of users. Raymond James Ltd. is not responsible for the availability or content of these external sites, nor does Raymond James Ltd. endorse, warrant or guarantee the products, services or information described or offered at these other sites. Users cannot assume that the external sites will abide by the same Privacy Policy which Raymond James Ltd. adheres to. Information in this article is from sources believed to be reliable, however, we cannot represent that it is accurate or complete. It is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell securities. The views are those of LT Wealth Management Partners and not necessarily those of Raymond James Ltd. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decision.

Subscribe now and get Access to 10 Proven Strategies for Building Long-Term Wealth

Your privacy is fully protected. By signing up to receive our wealth building strategies you give explicit permission for LT Wealth Management Partners to email you to deliver our enewsletter. It is important to note that your consent acknowledges agreeing to receive our newsletter knowing that your email may be stored on external servers outside of Canada.

Wealth Tips Document Overview

10 Proven Strategies For Building Long-Term Wealth

Download these 10 wealth building strategies plus more with the LT Wealth monthly newsletter – subscribe now and enjoy a wealth of knowledge.

Your privacy is fully protected. By signing up to receive our wealth building strategies you give explicit permission for LT Wealth Management Partners to email you to deliver our enewsletter. It is important to note that your consent acknowledges agreeing to receive our newsletter knowing that your email may be stored on external servers outside of Canada.