It’s midterms! Many people want to make financial decisions based on who they think may win, or which party may take control of the Congress. While periodically making tweaks or adjustments to your investment strategy over time may be good, making emotional based decisions is not.
If you are making an emotional decision about your money and investments due to an election, you are essentially engaging in a form of market timing. Not a good idea. Research has shown that market timing is really a losing bet. You should always be making decisions based on your own long-term goals and personal risk tolerance. Not some hair-on-fire headline.
Consider the policy pitches heard during any election cycle. Rarely does the winning candidate and party get to enact legislation that matches the promise. For example, Biden pitched a nearly $3 trillion infrastructure package. Once in office however, the bipartisan reality was that only about $1 trillion of the package has been able to be implemented. Those campaign promises become harder to actually implement and what we get is usually something less.
We do know that historically speaking, markets have a tendency to rise after midterm elections. Since 1946 there have only been two elections where this was not the case. When reviewing the historical data, the six-to-nine months leading up to a midterm election tend to be very rocky and downright depressing for investors. The six months after tend to revert to a more predictable, and generally upward, trend. Lesson? Stay the course! Stick to your overall investment plan and don’t be swayed by emotion.
So, get out there and vote! Just don’t let emotion guide your investing in this instance. Stick to your plan. As an independent CERTIFIED FINANCIAL PLANNER™, I can help you with your personal financial plan. Contact me and let’s get started on a savings, investing, or retirement plan. #vote #talktometuesday #education #Hireaplanner #stressfree #savings #retirement #CFPPro #DJIA #MarketDownturn #inflation #recovery