We know that many of you have been watching the current election cycle and are curious (to say the least) about how the results may impact the economy and, thus, the markets and your investments. We too have been watching and listening in an effort to make sure we are cognizant of both real and perceived potential impacts. Just recently, we received this Global Market Update from one of our managers, Russell Investments. It gives a really good perspective on the current market environment, and this paragraph in particular lays out how we are feeling right now about the impact of the election:
"The U.S. elections are also nearing, with very competitive races for the presidency and control of Congress. It’s important to note that the democratic system of government in the U.S. features checks and balances across the executive, legislative, and judicial branches, which makes it hard for individuals and parties to enact sweeping change. As a result, the impact of politics on U.S. markets is typically limited."
In many recent client discussions, we have noted that history tells us that the markets tend to disconnect themselves from election turmoil, and strangely enough, the periods after elections tend to be very favorable regardless of how things turn out. We attribute that to markets always preferring the known to the unknown, and thus while we may get near-term volatility given how fast information flows, over longer periods of time markets will begin to weigh the actual probability of various policy and economic shifts and respond accordingly. In our minds, that will present both opportunity and continued vigilance.
We encourage everyone to stay engaged, to vote and to encourage others around you to do the same.
Please let us know if you have any concerns or questions that we can address as we move further into the election season...we are hear to help in whatever way we can.
