How to Invest During an Election Year

“What should we do with our investments to prepare for the election?"

I have been asked this question in many client meetings this year.  The 2024 election is on the mind of most investors these days.  I get it; the candidates are as polarizing as they are elderly.  Prepare yourselves to be overwhelmed with political B.S. for the rest of the year...

Elections create uncertainty, which tends to increase market volatility in the short-term.  But should investors treat election years differently than non-election years?

I looked at every election year dating back to 1980, here’s what I found:

Stocks have made money 81% of the time during election years dating back to 1980, averaging 8.8% annually.

To Summarize:  Election year or not, the gameplan remains the same. Stay invested.  Revisit your plan. Allocate enough cash for your short-term liquidity needs.  Rinse & repeat...

DON'T sell your stocks if your party doesn't win.  DON'T buy more stocks if your party happens to win.  DON'T get out of the market until "things calm down".  Elections are part of the equation; another is coming in 4 years...  

Stocks Bipartisan History:

Looking back, we see that stocks tend to grind higher regardless of who is in office.  More evidence that your Investment strategy shouldn't be based on the oval office!

What Goes Up...

The stock market has continued its tremendous rally into 2024 as both January & February saw gains.  As this bull market rapidly makes new highs, we begin to forget how rough 2022 was.  But you remember how this works...a 10% drop happens nearly every year. When a correction does occur, the media will ramp up their Armageddon coverage per usual, using the election as gasoline.  I'll be here to remind you that we've prepared for this, and the sun will continue to rise, and eventually stocks will too!