There’s
a saying that with enough prodding, you can make statistics say whatever you
want.
We
believe this is especially true for the loads of data surrounding presidential
elections. It’s possible to use the data to say two different things about the
economy, depending on the point you’re trying to make.
For
example, one analyst reported that since 1929, the S&P 500 gained an
average of 1.58 percent in a president’s first year in office. Another claimed
that since 1928, the first year of a new presidential term sees “the markets”
rise by an average of 6 percent. Citing different indexes and years can change
the story.
[CLICK HERE to read the article, “Why
markets tend to fall during a presidential election year,” from CNBC, Jan. 13,
2016.]
In
our opinion, the important thing to remember is that investing is personal.
Trying to predict market performance based on the direction of prices, interest
rates or presidential elections is not a sound long-term strategy. If it was,
more people would be successful at doing it. Please remember that 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.
This
election year promises to have even more fireworks than usual, but don’t let
national matters distract from your personal long-term financial goals. We’re
help to help you stay on track. With that being said, take a look at what
different analysts say about the financial markets and presidential elections.
[CLICK HERE to read the article, “What
Investors Need to Know About the 2016 Election,” from Oppenheimer Funds, Jan.
8, 2016.]
[CLICK HERE to read the article, “How Do
Stock Markets Perform during a Presidential Election Year?” from Yahoo Finance,
April 1, 2016.]
If
there’s one thing that is for sure, it’s that a presidential election year
creates more market uncertainly than non-election years. Most analysts agree
that markets tend to be calmer when an incumbent president is running for
re-election, because one known entity is more reassuring than two unknowns. The
same seems to hold true if the incumbent wins re-election. However, the stock
market may trend downward in the first year of a new party taking over the
White House.
It’s
also probably true that, depending on which party is in control, certain
industries may be positively or negatively affected. For example, if the next president
successfully repeals the Affordable Care Act, the health care industry would be
poised for changes.
[CLICK HERE to read the article, “How the
Presidential Election Will Affect the Stock Market,” from Kiplinger, February 2016.]
At
least one analyst has considered how a Donald Trump administration would impact
the markets, ranging from higher import tariffs, which would make some products
more expensive, to lower income taxes, which could prompt higher household
spending in the consumer discretionary sector.
At
the end of the day, it’s important to remember that dozens of factors impact
the performance of the markets -- and most investors have absolutely no control
over any of them. What’s important is that you stay focused on your long-term financial strategy with regard to whether it’s
on track to meet your retirement goals.
[CLICK HERE to read the article, “How
would a Donald Trump presidency affect the stock market?” from Los Angeles
Times, March 7, 2016.]
We are an independent firm helping individuals create retirement
strategies using a variety of insurance and investment products to custom suit
their needs and objectives.
This material has been prepared for our
firm and contains general information to help you understand basic financial
planning strategies that may help you work toward your financial goals. Please
understand that we cannot make any promises or guarantees that you will
accomplish such goals. All investments
are subject to risk including the complete loss of principal.
Throughout, we may generally discuss
different financial vehicles; however, nothing contained herein should be
construed as a recommendation to buy or sell any financial vehicle, nor should
it be used to make decisions about your investments.
The information contained in this material has been obtained from third-party
sources believed to be reliable, but accuracy and completeness cannot be
guaranteed; it is not intended to be used as the sole basis for financial
decisions.
If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.
If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.
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