The Election and Our Investments

November 23, 2020

Every four years, we all, try to predict which candidate will be better for the economy and the stock market.  We go through this emotional roller coaster every four years.  If we think of some prior elections, we were concerned that the stock market could tank after the election.

A number of weeks ago, I finished my designation in retirement plans.  That week, the country watched the first debate and the next day my classmates and I talked through zoom about what matters the most regardless of our political views.  We talked about health, family, friends and money!  We all know that 2020 has been a difficult year.   We are living through a global health crisis, high unemployment and drastic changes to our daily routines.  And while at the beginning, the stock market reacted very negatively to the pandemic, the recovery since March has been dramatic.

My teacher from Cannon, Larry Divers, shared the graphic below.  And it is fascinating to go back in history time and see the history of the Dow Jones between 1945 and 2020.   There are many theories about whether Republican or Democratic policies are better for the stock market, however, what we see is that over the long periods of time the stock market has rewarded investors regardless of who was in office.

Sometimes the best thing to do is nothing. Have an investment plan and stick with it.  Focus on what we can control. Overall, it is important to stick with the basics:  rebalance routinely and diversify.

Angela O’Donnell

Trust Officer, AVP

The posts expressed are views of FSTC and are not intended as advice or recommendations. For informational purposes only.  FSTC does not offer tax or legal advice, professional counsel should be sought for tax or legal advice.