As we enter another election year, we thought it might do us all good to look back at the thoughts that Sara-Bay has posted over the years on this subject.
We found several pieces about elections and election years, and the effects, if any, on stock market values. Without getting into the particulars of the races, a quick review confirms that the basic principles still apply.
In 2016 a market update piece we posted said this:
“A few days before November 8th, Ben and I were attempting to reassure some of our clients, both verbally and via email, that markets do not necessarily spiral into a sharp decline immediately after, or as the result of, an election. Uncertainty has always created a jittery stock market. This race was especially contentious and probably created as much anxiety as any Presidential contest we have previously seen, but often the anticipation of an event is worse than the event itself.
In my years in this business, I have observed several Presidential contests. Despite the conflicts, disparagement, and acrimony involved while the race is ongoing, the vast majority of us ultimately accept the results when the contest is finally decided. We are not unaware of the demonstrations of those angry and disheartened voters for whom the race went the wrong way, but we all know that this will eventually fade, and we shall move on.
Even if some of the fears about the change in government prove true, the fact is that the health of the American economy has always shown itself to be impervious, even to inept and ineffectual interference by government. We remain a very strong country with many creative and industrious people.”
In 2020 we reiterated:
“Without fail, there is always a good degree of trepidation as we approach a national election. We suppose this is normal, especially in the days leading up to the event, as the rhetoric between the two candidates becomes ever more confrontational, accusatory, and contentious. It is disconcerting, to say the least.”
As is often the case, true insight stands the test of time. For these and other interesting missives visit our Market Update page and look over the years of postings.
Finally, I am happy to report that this conclusion from the 2016 blog remains true as well:
“It is our goal to increase your capital over time, so that it will become a source of income for you in the future. The steady accumulation and buildup of an account does not occur overnight. It is built gradually by accretion, which is why we carefully construct our portfolios to put a long-term strategy in place.”