The upcoming election is prompting some people to reconsider their investment strategy.
In fact, 45% of consumers with $100,000 or more investable assets expect to make changes to their portfolio due to the upcoming 2020 presidential election.1
But if history is any guide, patience may be the answer.
History as a Guide
For the past 12 presidential elections, the Standard & Poor’s 500 index has notched a 4% gain, on average, in the 90 days after the election.2
Of course, past performance does not guarantee results. And there have been some notable exceptions to the trend. In 2008, for example, the S&P 500 dropped more than 10% in the three months following the election as the global financial crisis gripped the markets. And in 2000, the S&P 500 fell 4.1% from election day until December 12, when the Supreme Court ruled on the election between George Bush and Al Gore.2
Investing involves risks, and your goals, time horizon, and risk tolerance should be what drives any changes to your portfolio strategy. If you’re concerned that the upcoming election may change one of these critical factors, perhaps it’s time to review your investment approach.
When patience may be the answer, it’s a good time to reflect on a quote from legendary investor Warren Buffett, who reminded us that, “The stock market is a device for transferring money from the impatient to the patient.”3
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Investing involves risks, and investment decisions should be based on your own goals, time horizon and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
1. HartfordFunds, 2020
2. HartfordFunds, 2020
3. Pinterest.com, 2020