How do Presidential elections affect the market?

February 23, 2024

Unlock the mysteries of market behavior during Presidential elections with our latest video! ðŸ“ˆ
Discover how the proposed economic policies of presidential candidates can sway investor sentiment and influence market dynamics. From tax cuts to trade agreements, we explore the intricate connections between politics and the stock market. ðŸ’¼ðŸ¤
Join us as we debunk common myths and reveal historical data spanning nearly a century, showcasing the resilient upward trend of the stock market, regardless of political party in power. Don't miss out on this insightful analysis!

#ElectionImpact #MarketTrends #InvestingInsights #FinancialAnalysis
(Graph Source Dimensional)

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*** The opinions expressed in this video are for general purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. It is not intended to provide tax or legal advice. To determine which investments are appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As Always please remember investing involves risk and possible loss of principal capital: please seek advice from a licensed financial professional.
Arista Wealth Management is a registered investment advisor. Advisory services are only offered to clients or prospective clients where our firm and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Arista Wealth Management unless a client service agreement is in place. **

Full Transcript:

Hello, welcome to Arista Advice! Question of the week is: "Paul, it's 2024, and there's an election upon us. What should we do with our portfolio?" The short answer is nothing. We buy assets for long-term appreciation. There's a lot of research out there, listeners, that show that the super wealthy people make less frequent changes in their portfolios. They buy an asset, and they don't check into it for 5-10 years. If you've checked your portfolio in the last 30, 60, 90, 120 days, don't do it. Stop doing it.

But let's get into the Arista advice. The Arista Advice says that the year of a political election, people's anxiety, frustrations and uncertainty goes up, and it spikes. What's the best thing to do? Nothing. Allow the market to do its thing, and allow yourself to not be influenced. Investors often try to predict the direction of the stock market based upon economic short-term events. The proposed economic policies of presidential candidates can influence the market expectations, but if a candidate advocates for pro-business policies such as tax cuts or deregulation, it may be viewed positively by investors. But if they do, that's short-term news. The worst thing to be doing is to be digesting short-term news and thinking it's going to have a long-term effect. It doesn't.

Presidents stay in for four years, and many times it takes two, three years for their policies to even get passed, and then by then, a new one's in. Remember, presidential candidate's stances on trade and foreign policies can impact international markets, but oftentimes it's immaterial. The stock market valuation and businesses and goods and services dwarf what a presidential candidate can even do in the short time that he's in. Changes in financial regulations proposed by candidates can, but oftentimes it takes a while to get into effect, and then the new one goes in and unwinds what he did, as a childish form of "My policies are more important than their policies." It's jovial gibberish. Just remember, buy quality assets for the long-term and stay invested.

As you'll see on this chart, this chart couldn't say it any better. Red for Republican, blue for Democrat, and guess what happens? You look at it, and no matter whether it's Democrat or Republican, the market goes up. Goods and services are being bought and sold all over the United States, all over the world, and that drops to the bottom line for a positive earnings and a positive net income for corporations.

In conclusion, the message is that while political events, including presidential elections, can impact the stock market short-term, in the long-term, it's really a moot point. Remember, go to AristaWealth.com to get other videos, tools, tips, and resources to help you live a life of significance.