Investors Benefit by Ignoring Political Noise
The Democratic National Convention has wrapped up, and Joe Biden has officially accepted the Democratic nomination for president. With the Republican National Convention kicking off this week, we will be bombarded with predictions until November of who will win, and the subsequent impact on the markets. As we draw closer to the presidential election and the political attention increases, it is crucial to stay disciplined and focused on your goals.
Continued volatility in the markets is inevitable, but swaying from your customized asset allocation and investment strategy because of headlines and market noise can affect your long-term portfolio goals. The following graph highlights a balanced 60/40 portfolio. Markets often price in expected outcomes of political and economic forecasts. The data shows that investors benefit by ignoring political noise as, throughout history, there is no statistical difference whether we end up with a Democratic or Republican president. History has shown us that markets ultimately follow economic cycles, rather than political ones, and we should not get wrapped up in how the markets will react after all of the votes are counted.
We continue to monitor all client portfolios and regularly make necessary adjustments based on market fundamentals and individualized goals and objectives. We always want to hear from you, so please call or email with questions and to provide updates about your situation.