The 2024 Election and Your Portfolio: Should You Be Worried?

The 2024 Election and Your Portfolio: Should You Be Worried?

The question I’m getting as much as any others in recent weeks is “What do you think about the election and how will it impact our investments?”

It seems every single election, people say, “This is the most important election of our lifetime.” Of course this can’t be the case every single time, but it always feels that way in the moment.

The President and the Stock Market

There’s a long history of both parties using the narrative that if the other party wins, the economy and even the country are going to collapse.

Truth is, people tend to give the president, regardless of which party is in office, more credit and more blame than is deserved. That’s not to say that the president is not powerful, but on the list of variables that matter to the stock market and the economy, the president is further down that list than most people think.

Could we see some additional volatility around the election, yes, of course; markets do not like uncertainty.  But if you look back historically, it usually proves to be short-lived and arguably insignificant.

Check out this hypothetical growth of $1,000 invested in the S&P 500 in 1928:

Source: https://www.virtuswealth.com/which-political-party-is-better-for-investors/

The trendline is obvious and not tied to any one political party inhabiting the White House. Standout events—like the Great Depression, the stagflation of the ’70s, and the ’08 financial crisis—are easy to pinpoint. The swearing in of a new president…not so much. 

Be the Commander-in-Chief of Your Own Finances

With a robust financial strategy, elections can essentially be inconsequential to your financial health. Even amid a heated election, here’s where our focus should be:

Your objectives. Each goal you’ve set was done for a reason. Remember the motivations behind your goals and keep sight of what truly matters to you. This is the core tenet of our WealthwhileSM philosophy: objectively understanding the ways in which you can extract the most pleasure and impact from your assets as you turn monetary investments into life-enriching ones.

The noise surrounding the election shouldn’t distract you from your aspirations, so don’t let the sensationalist media and political grandstanding bump you from your chosen path. 

Your long-term strategy. Market fluctuations, both big and small, will always happen. It’s easy to fall into the trap of thinking you need to adjust your plan based on market noise. Even experienced investors can be seduced into thinking that any normal dip is the beginning of a catastrophic plunge. But your whole reason for investing should be to decrease stress from your life, not add to it! Don’t focus your attention on the day-to-day movements; instead, take a more holistic, high-level view when it comes to financial planning.

Your informed decisions. A fundamental investment principle is to avoid making reactive, emotion-driven financial decisions. One of the most dangerous things investors can do when they have very strong political beliefs is to let those political beliefs guide how they invest, particularly in the short term.

Instead, work with your advisor to devise a financial plan based on data-driven analysis and your long-term goals, and stick to it, regardless of the election and other noise.

About Marcus

Marcus Miller is Wealth Manager and Shareholder at Deerfield Financial Advisors, a fee-only financial services and wealth management firm with offices in Indianapolis and Chicago. His role includes strategic planning, income tax optimization, insurance and estate planning, and investment management for a diverse group of clients. Implementing Deerfield’s unique financial planning approach called WealthwhileSM, Marcus helps clients live their best lives and focus on their most worthwhile passions. He is passionate about helping them pursue, experience, and maintain true financial independence for their families, without the sales pitch. He truly enjoys helping people and developing deep, meaningful relationships with clients.

Prior to joining Deerfield in 2012, Marcus gained valuable experience at a Big Four accounting firm, a nationally recognized brokerage house, and a distinguished independent advisory firm. He holds a Bachelor of Science and Master of Science in Accounting from Ball State University, the Certified Public Accountant and CERTIFIED FINANCIAL PLANNER™ designations and is a NAPFA Registered Financial Advisor. Marcus serves on the Board of Happy Hollow Children’s Camp and on the Planned Giving Committee at the Indianapolis Zoo. He is a member of the Professional Advisor Leadership Council at the Central Indiana Community Foundation (CICF) and is involved at his daughters’ school.

Marcus resides in Carmel, IN, with his wife, Andrea, and their two daughters. They love spending time outdoors hiking, bicycling, camping, and traveling to national parks. (They have a goal to visit all 63 national parks; Yosemite is the current favorite.) An avid reader, especially of non-fiction, history, and finance books, Marcus also trains in Brazilian Jiu-Jitsu, likening it to a physical chess match that involves problem-solving and mental strengthening with physical consequences. To learn more about Marcus, connect with him on LinkedIn.

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