Fear not, you’re not alone. As election season heats up, it’s natural for investors to feel a bit anxious. Headlines and nonstop media coverage often predict market turbulence based on political outcomes, but history teaches us a different lesson: elections have little-to-no impact on long-term investing success. 

 

At Bowline Financial, we don’t make decisions based on politics, nor are we political. We’re here to help cut through the noise and focus on what truly matters for your financial future.

 

Why This Year’s Election Has Little Impact on Long-Term Investing:

 

Markets are resilient. They’ve weathered countless elections, wars, and economic upheavals. The S&P 500, a key market index, has grown significantly over the past century despite numerous political changes. The underlying strength of the market comes from businesses innovating and growing, not from who’s in the Oval Office.

 

Elections can cause short-term volatility as investors react to the uncertainty of potential policy changes. However, this volatility is usually short-lived. Long-term investors understand that staying the course and maintaining a diversified portfolio is more effective than trying to time the market based on election outcomes. Historical data shows that market performance over presidential terms often balances out regardless of which party is in power (see chart below).

 

The economy’s fundamentals, such as corporate earnings, interest rates, and consumer spending, play a much more significant role in shaping market performance. These factors drive long-term growth and are influenced by a broad range of global and domestic variables beyond any single election.

 

A sound investment strategy doesn’t hinge on who wins an election. It’s built on principles of proper diversification, regular contributions, and a focus on long-term goals. By sticking to these principles, investors can mitigate the noise of elections and keep their portfolios aligned with their financial objectives.

 

As always, don’t hesitate to give us a call if you would like to discuss the appropriateness of your portfolio or just have a refreshing non-political conversation…they will be harder and harder to find as we approach November. 

 

The chart below shows a beautiful snapshot of how markets have historically rewarded long-term investors regardless of presidential party.