The US election – another unknown in 2020!
We thought we might be writing this with a confirmed winner but in true 2020 style things haven’t played out in a straightforward way!
We’re talking about Biden vs. Trump of course.
Elections and other political events can often bring about short-term volatility in the stock market and the panic inducing headlines that go hand in hand! So, this week we’re reinforcing the fact that change isn’t something you need to fear as an investor.
We can confidently tell you what to do with your investment portfolio before a result has even landed – because whoever takes the seat in the white house is irrelevant (from a money perspective at least!).
Here’s our top tips for the days, maybe weeks, ahead:
1. You should continue to take a long-term approach with your money. If you know what your goals are, and your portfolio is set up to help you achieve them, why alter the path? There is no correlation between who is in power in the UK, US or any other country and what future returns will be.
2. Many of us get passionate about politics and you’re well within your rights to do so, but don’t let your emotions get the better of you. You might have a gut feeling about what is going to happen next but as this year has shown us – anything is possible! One thing we do know is that emotionally fuelled decisions can have a detrimental impact on your goals and aspirations.
3. Remember the evidence. The S&P 500 shows that returns in election years are similar to those in non-election years*. So, you don’t need to be making changes in anticipation of political events.
Here are some links to other blogs we’ve written about this topic – we hope this helps bring you peace of mind. If you have any questions or concerns, please get in touch as we’re more than happy to chat things through.
For now, we’ll leave you with the hope that by the time next week’s blog comes around we’ll have a clearer idea on who has won the race!
*Evidence based investor