I believe I wrote about this a number of months ago as the election season was starting to ramp up, but I feel the need to mention it again: Don’t let politics drive your portfolio decisions. In the weeks leading up to the election, it can be easy to get caught up in the theories and predictions about what might happen if a particular candidate wins or a certain party gains power. Some will take those predictions and make portfolio decisions in the hopes of getting ahead of the curve regarding how the markets might react to certain administrations. First off, it is incredibly difficult to predict how the markets will react to elections. What economic pundits predicted at the start of the past two administrations did not come to pass with the markets performing much stronger than expected. Rather, you should make your portfolio as you normally would and ignore the election when doing so. Don’t give you portfolio any special treatment between now and Nov. 3. That can be hard to do, especially with the news cycle (and social media and conversations with friends) being filled with election talk, it won’t be easy. However, trust me, it will be worth it to keep your portfolio on the same road it’s be going on.
A few weeks ago, I wrote about whether the pending impeachment inquiry would–or could–impact the markets. While I do tend to stay away from talking about things like the Fed or politics, I may make some exceptions over the next year or so, especially as we move towards next year’s elections. As you may well know, the Fed lowered interest rates again last week, which was the third time they’ve done so since July. This move will impact the markets, but by the time you figure out what that impact will be, the markets will already have reacted and you’ll be well behind that. Instead, don’t get too worried about Fed policies and decisions and focus on making decisions that work for you. That means focusing on your own risk appetite and investing companies that you truly believe will help you meet your goals. The same can be said for following politics, especially in an election year. Candidates from both parties will say a lot of things regarding economic policies and plans–some of which may impact the markets–but you shouldn’t let that sway your retirement plans here and now. Yes, you can pay attention to what they are saying, but you shouldn’t use that information to make investment or retirement plan decisions. With all that said, I am encouraging you to be informed, but to also be aware that what you hear doesn’t need to be acted upon.