Politics and Your Investments
Wealth is always in formation and the quality of the information we receive and act upon, determines our long term success. 2026 is a year of heightened political anxiety for some people, and therefore some investors may worry about what the future holds. It’s good to remember that we’ve made it through bouts of change in the past. Recently talking with a client, I reminded him of what really makes the markets and the economy tick, because he was already planning on what to do immediately following the mid-term elections should the house and senate majorities go certain ways.
Policies certainly do matter when it comes to the economy and how companies make investments to position themselves for the future. However, larger economic forces have mattered more. Market performance comes back to fundamentals such as earnings of corporations. I don’t think that if an election goes a certain way, consumption of goods and services will come to a screeching halt. Markets have not fallen apart overnight over the outcome of an election. I vividly recall the days following the last several elections and having to proverbially walk some investors off of the ledge to not pull all of their stock based investments into cash, but rather to maintain focus on their goals and long-term time horizons. That advice served well, because had they pulled out of the stock market when either former Presidents Obama or Biden or both of President Trump’s victories were declared, they would have missed meaningful market rallies.
You may be passionate about politics and excited for elections. There are several issues to weigh upon for which to cast your votes, and you may feel vehemently opposed to certain candidates or parties, and consequently may feel pessimistic about the future on election day. However, it is my personal opinion that our next election will have less impact on the financial markets than many people fear. Ultimately, it’s long term fundamentals that drive stock performance, and these fundamentals are bigger than any one political party or election result. In this sense, it’s good not to mix politics and your investments.
