What do presidential elections mean for your portfolio?
Should you change your investing strategy based on who wins?
Elections bring a lot of noise, and I wanted to dispel some market myths around this election.
Myth #1: Elections usually bring big market swings.
You would think elections cause major market shifts (given all the politicking and intense emotions).
However, history shows that elections historically don't influence market performance as much as the economy does.
Growth, inflation, corporate profits, and other business and economic trends usually have a stronger effect on the stock market.1
The president and Congress impact markets through the laws they pass and decisions they make, which are more powerful influences than elections alone.
Myth #2: Markets perform better with one party in power.
You might have heard that markets perform better under Democrats or Republicans.
History shows that markets have performed well under both parties.2
Interestingly, stocks have historically performed best under a “divided” government when neither party controls both Congress and the White House.
Myth #3: The “election cycle" means I should change my investment strategy.
You might have heard of the so-called “election cycle,” where markets are supposed to follow a consistent pattern every four years.
The chart shows S&P 500 performance since 1950.2
You can see that there isn't a consistent pattern to performance, with both negative and positive years over time.
However, on average, markets have been generally positive each of the four years.
Emotions are high, and changing your strategy ahead of a contested election can be tempting, but it's not a good idea.
Truth: Elections are just one factor affecting markets over the next few weeks and months.
We can expect volatility around the election, but traders are also analyzing a lot of other factors:
And much more.
Truth: Tax laws and regulatory changes may impact markets in 2024 and 2025.
With many provisions of the Tax Cut & Jobs Act (TCJA) scheduled to expire at the end of 2025, tax policies are something we’re monitoring closely.3
International trade issues may also influence markets if tariffs increase or supply chain problems continue.
Bottom line: Elections bring uncertainty, so we're watching carefully.
We don’t know how the election results will play out over the coming months and years.
So, we’re staying flexible, watching the trends, and making careful shifts where needed.
Do you have any questions about how the election could impact your portfolio? Feel free to reach out.
Sources
2. https://www.fidelity.com/learning-center/trading-investing/election-market-impact
3. https://tax.thomsonreuters.com/blog/what-to-know-about-tcja-expiration/
Chart sources:
https://www.fidelity.com/learning-center/trading-investing/election-market-impact
Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.
This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability, or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific situation with a qualified tax professional.
The S&P 500 is an unmanaged composite index considered to be representative of the U.S. stock market in general. Past performance is no guarantee of future results. Indices are unmanaged, do not incur fees, costs, and expenses, and cannot be invested into directly. For illustrative purposes only. Past performance is no guarantee of future results.
Content prepared by Snappy Kraken.
535 Third Street
Beaver, PA 15009
LPL Disclosures
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Three Cord True Wealth Management, LLC, a Registered Investment Advisor and separate entity from LPL Financial.
The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: AR, AZ, CA, CO, DC, FL, GA, IA, KS, MD, ME, MA, MI, MO, NV, NC, NJ, NY, OH, PA, SC, TN, TX, VA, WA, WV.
Professionals associated with Three Cord True Wealth Management,LLC may be either (1) registered representatives with, and securities and advisory services offered through LPL Financial, Member FINRA/SIPC, a registered investment advisor; or (2) solely tax professionals of Three Cord True Wealth Tax Solutions, LLC, and not affiliated with LPL Financial. Tax-related services offered through Three Cord True Wealth Tax Solutions, LLC DBA [Three Cord True Wealth Management, LLC]. Three Cord True Wealth Tax Solutions, LLC is a separate legal entity and not affiliated with LPL Financial. LPL Financial does not offer tax advice or Tax-related services.
No client of Three Cord True Wealth Management, LLC is under any obligation to use the services of Three Cord True Wealth Tax Solutions, LLC and can engage a non-affiliated Certified Public Accountant or tax preparation service provider.
Three Cord True Wealth Management Important Disclosures
Three Cord True Wealth Management, LLC is an SEC-registered investment adviser. Three Cord True Wealth Management, LLC may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements. Three Cord True Wealth Management, LLC website is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information such as articles written by third parties, firm-written newsletters and/ or publications, and third-party links. Accordingly, the publication of Three Cord True Wealth Management, LLC website on the Internet should not be construed by any consumer and/ or prospective client as our Adviser's solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Any subsequent, direct communication by the Adviser with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of Three Cord True Wealth Management, LLC, a copy of Three Cord True Wealth Management, LLC’s current written disclosure statement discussing Three Cord True Wealth Management, LLC's business operations, services, and fees is available at the SEC' s investment adviser public information website -www.adviserinfo.sec.gov 307480 or from the Adviser upon written request, nraught@3ctruewealth.com.
Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by the Adviser), will be profitable or equal any historical performance level(s).
This website and information are provided for guidance and information purposes only. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/ or tax professional before implementing any strategy. This website and information are not intended to provide investment, tax, or legal advice.
Insurance products and services are offered and sold through Three Cord True Wealth Management, LLC and individually licensed and appointed insurance agents.