Broker Check

The Election and Your Investment Portfolio

November 02, 2020

No doubt some of you will have concerns regarding your investments depending upon the outcome of the U.S. election. While these concerns are understandable, unless you are a short term trader or have immediate short term needs dependent upon your portfolio of investments, this should not be a major concern of yours. The market (primarily U.S.) tends not to concern itself with the outcome, over the long-term, regardless of which party is in control of the White House.

If you have a well diversified (globally) portfolio and rebalance systematically, over the long-term you will receive the returns the market delivers – which history has shown to be upwards over time.

Will the market react to however the election turns out (even with delayed results)? Yes and possibly the reaction may be quite volatile up or down depending on how the results are immediately perceived. However, industry and markets somehow, in our system, manage to adjust quite well to whoever is in office and the policies they advance.

Regardless of who is elected or reelected it will neither be Nirvana nor the end of the world as we know it. Life will go on, consumers will continue to have needs and businesses will adapt to meet them and how well those businesses do meet them and evolve over time will determine how well their individual stocks will perform. Insofar as the market as a whole? Over time, it adjusts and doesn’t seem to really care who is in power.

So, sit back and enjoy or not the results but rest assured, for long-term investors the election is not a significant issue for the long-term performance of your portfolio. More important to its long-term success is how it is structurally allocated, diversified and how disciplined as an investor you are!