The recent election may have you wondering, 'what's next?' regarding your financial strategy. Let's break down what the election results mean for you as an investor.
First, it is important to note that stocks have historically gone up no matter which political party is in the White House.
It is important you maintain a long-term perspective when it comes to your investment strategy, regardless of which political party is in power. Remaining invested over the long-term has proven to be a much wiser strategy than attempting to time the market based on politics, or any myriad of other factors.
Widespread buying pressure and surging volume drove the S&P 500 up 2.5% the day after the election, marking its best post-Election Day performance on record.
Positive performance after Election Day tends to be a good sign for future returns. Of the nine other post-Election Day advances since 1928, the index gained 4.3% over the following month, with only one period producing a negative return (1936 was the last time market was lower one-month after a positive post-Election Day performance).
Looking out even longer, three-, six-, and 12-month returns averaged 6.8%, 8.5%, and 9.5%, respectively. For comparison, when the market was lower after Election Day, three-, six-, and 12-month returns averaged -0.6%, 1.9%, and 4.7%, respectively.
Policy changes may include the implementation of trade tariffs and an extension of tax cuts.
Official policy changes are uncertain as we wait for the president-elect and the new Congress to take their seats. For more information on potential policy changes and a detailed, post-election investment outlook, please check out this article from T. Rowe Price.
Ultimately, post-election results can bring about a lot of emotions and uncertainty. If you find yourself worried about how these policies may impact you, please reach out to your financial professional today to share your concerns. They would be happy to discuss this with you further, and hopefully ease your concerns.
Harvest Point® advisors are here to help you build a legacy that is made up of more than just money. Maybe you don’t have a financial advisor. If you are looking to get connected with a qualified professional, please contact us in order to determine whether we would be a good fit to work together.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Sources:
LPL Research
Carson