It's Election Time
By Gary Silverman, CFP®
Texas just had a round of voting last week, the lead-in to the primary elections is in progress, and the airwaves and printed pages are about to be inundated ahead of November 2024. I thought it might be time again to go over what you should worry about concerning your investment portfolio during these critical times.
Still, during the next 12 months, you’re going to hear how one party or the other will destroy the United States as we know it. And because of that, people will be timid about having their money in the stock market. In fact, during an election year, an abnormally high amount of money is invested in ultra-safe money market funds and bonds as folks flee the at-risk investment “those people” are out to destroy.
Yes, there are a few politicians who would like to turn the United States into a socialistic nation, where most, if not all, companies either become government enterprises or give in to the workers themselves. I can assure you that more than 99% of the folks we send to Washington have been and continue to be rewarded richly by the capitalistic system and don’t want it to change too much.
Looking back at the socialistic leanings of the New Deal (the 1930s for the non-history buffs), I recently saw a study which showed a $1,000 investment in the S&P 500 would have grown to over $19 million today. We also saw eight Democratic and seven Republican presidents during that period. And no, neither side had all the growth…it was spread pretty evenly.
Indeed, during the primary season and on through the November elections the markets tend to be more volatile. Markets don’t like uncertainty. But in the last 20 election years, only two of them saw the stock market drop. And even then, it was not about politics.
In the year 2000 we experienced the infamous Tech Bubble bursting, and in 2008 we saw the even more infamous (infamouser?) Financial Crisis. Sure, pundits will blame one party or the other for these market disasters, but it wasn’t the election year that caused the crashes.
And remember, the other 18 election years saw the markets in positive territory.
There are a couple things I would like you to worry about. There’s this program you may have heard of called Social Security. Most retirees depend on it for a significant part of their retirement income. However, the system is broken and needs to be fixed. Please ask your national candidates what they are going to do about it. I’d like to hear something specific.
My other concern is the national debt. Go look it up at usdebtclock.org. It’s kinda pretty and definitely scary. We’re over $33 trillion in debt, or about a quarter million dollars per taxpayer. If you don’t think that’s a problem, then ignore me. I suggest the comic page.
May God protect the innocents suffering in the myriad of conflicts around the world.