Frankly, the evidence would suggest the answer to our headline’s question is no.
This chart from Vanguard shows us that after the first 100 days of a President’s term, the market tends to calm significantly. And some fluctuation prior to the first 100 days isn’t a sure sign that the market is headed for a wild ride, either. In other words, you’re going to hear all of kinds of media sources speculate about potential market swings up and down. Even if such a swing occurs on this day or that day, is it good practice to make dramatic moves to a portfolio in reaction to what occurred on any given day? Not in our experience.
Where Do You Go From Here?
We’ve shared this kind of data from the past to make a point on your own investment policy. Even though there are no guarantees of how stocks will perform, the best view of investing is the long-term one. A reactionary approach to news of the day, including when President-elect takes office or what he tweets or any speeches he makes on economic policy is investing based on someone else’s plan. Not yours.
As you chart the course for your own financial goals, including how much you should save well into your retirement years, a combination of patience and perspective can serve you well. If you want to reach those goals, sitting out or pulling back on investing based on whoever is in office or what their fiscal policy is may only come back to hurt your portfolio later on.
If the data tells us anything, it’s that equity markets present the opportunity for consistent asset growth across election years and different political parties in power.
What’s encouraging about that? You’re still in control.
Both parties will take to the airwaves trying to draw connections between their President and the economy until the cows come home. It’s what they do. There will also always be economic events that are out of your control, like Brexit and President-elect Trump’s trade policy toward China.
Yet, the plans, goals and portfolio you hold are still your own. No President is going to customize that for you. But a proactive review of your portfolio on a quarterly basis with Fiduciary Financial Partners is very much within your control. After all, we’re not just professionals who broker transactions. We’re true fiduciaries who can advise you on your investment mix and whether or not adjustments need to be made. And since we’re not paid on commission, you can be sure that it’s advice in your best interests, not our own.
In a sea of economic questions, we hope the message above is an empowering one that shows you that, no matter who has the Presidency, you can Confidently Embrace Your Financial Future as much as ever when you have a sound strategy for investing.
Let’s talk more about it as we head into 2017. To schedule that conversation about your portfolio, call Fiduciary Financial Partners today at 630.780.1534.
Fiduciary Financial Partners, LLC is a Registered Investment Adviser. This blog is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Fiduciary Financial Partners, LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Fiduciary Financial Partners, LLC unless a client service agreement is in place.