James Greenly Profile Circle

Jun 13, 2024 | JAMES GREENLY

POLITICS & PROFITS: DOES THE MARKET CARE WHO’S IN POWER?

2024 is a record year for elections. 2 billion voters will be heading to the polls in 50 countries, including the United States, India, and of course, the UK. But do these potential global power shifts mean you should be pre-empting how the markets will change and altering your portfolio accordingly? 

In short, almost certainly not.  

In the UK’s election, for example, key areas of contention including pensions, ISAs, tax thresholds and housing will likely make the headlines. 

But, ultimately, no one knows how the results of either election will affect global financial markets. And any attempt to profit off any potential short-term reactions to these political events is merely market timing in disguise.    

History shows that markets have increased over the long term. Businesses and their leaders are quick to adapt to the changing landscapes in which they operate. They find ways to innovate and grow irrespective of the party in power. And that means the stock markets are resilient, offering strong returns to patient, disciplined investors.    

WHAT SHOULD YOU DO?   

The correct answer, for most people, is nothing.

Politics, while undeniably important, is also a very emotional subject. Emotions and investing don’t mix well. Emotions open us up to short-termism, and that’s why controlling them and thinking long-term is one of our six principles of successful investing.    

If your goals haven’t changed, and you’re already invested in the appropriate portfolio to achieve them, it’s likely safe to continue as is.    

The elections’ impacts are out of our hands. So, instead, focus on the things you can control, like how much you save, how much you spend, how much you invest, and asset allocation.   

This communication is for general information only and is not intended to be individual advice. You are recommended to seek competent professional advice before taking any action. 

Past performance can’t guarantee what investments will do in the future. The value of an investment can go down as well as up, so there’s a chance you’d get back less than you put in. 

WANT TO FIND OUT MORE?

Send an email to us at theteam@cooperparry.com