In just over two weeks, Americans will head back to the polls to decide, among other things, who will lead our country for the next four years. Rest assured this won’t be a political article attempting to sway you toward any candidate. We’ve all been inundated with political rhetoric, and personally I find it exhausting.
A chart asks, “What if someone was only invested during periods when their preferred party ran the White House?” Assuming a hypothetical investment of $10,000 in the S&P 500 and a starting point of Jan. 3, 1950, a Democratic investor would see an account balance of a little more than $405,000 on March 28, 2024. A Republican investor for the same period would see a balance of just under $78,000.
Then the second choice: When do you buy back in? Is it a day, a week … a month later? When the “dust settles,” whatever that means? Most people don’t actually think this through when making knee-jerk reactions based on emotions. One cannot escape turmoil nor minimize frightening events. Yet many people, for many years, have fled the investment markets at the most inopportune times. Human nature is wired to run from danger, even if it’s only a perceived threat. Your challenge as an investor is to remain focused on the plan, regardless of what your emotions may be telling you.