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Should You Make Any Changes To Your Investments Due To An Election? Thumbnail

Should You Make Any Changes To Your Investments Due To An Election?

Investments

What actions should you take with your investments due to the election?

Find out in this short video:

01:01 - Biggest mistake people make

01:13 - How have markets done prior to election and shortly after?

03:14 - What can you do right now to make sure you are ok?

Hello! This is Jeremy Finger with the Riverbend Wealth Management. Many people have been asking what should I do differently now that it's election year? And we're coming up on the election very soon. I should do anything, any different. Many people are quite nervous because all the hype on the TV and that's by design, by the way, it jacks up viewer ratings. It's kind of like, people watch the weather channel when there's a hurricane. But is there anything really functional, should we do anything? Jeremy, I want to wait until I really figure out what's going to happen and then I'll do something. Well, that could be very costly, I've seen people get more conservative because their person didn't win and I've seen people get more aggressive because their person did win, both of which can be a problem. Number one is that you may miss out on opportunities because you let your emotions take over, the other thing is, you may get outside your risk tolerance which also could be a problem, but what really happens before and after election on a historical basis? Take a look at the screen here. Historically speaking going back to 1972, the market before the election, if you have gained a little over 1%, now my question to you is how much you make on that cash right now? Would it make a really good idea to take all your money and put it into cash and wait to see what happens and yet actually no return with the idea that you're gonna do something really good or different after you figure out what's gonna happen to the election, the answer is those types of decisions where you let your emotions take over generally don't work out. So before the election, your average about a 1.4% gain and after the election, 3 months after the election you're averaging about 4% gain. So as long as you have your investments set up properly according to what your needs are, you and your family's needs. Then it's best to typically stay put. Now, are your investments set up that way? I don't know. If you're a client of mine, yes they are, if you're not a client of mine, you feel free to give me a call, okay? And then when you look at the long term picture here, well, what if my guy or person doesn't win? And so the average market tends to do well over time as you can see here. You know, it tends to go up no matter what political person in office, okay? Now, in the near term does it affect certain things very near term? Yeah. Can you predict when those near term things are gonna be positive or negative? Answer is no. No, absolutely not. So, just to recap, make sure that your investments match your overall investment plan. And then try not to get so emotional when you're seeing things on the TV because when you get high emotions, people tend to make rash decisions and those rash decisions can really be costly and long term. I've seen people make devastating financial decisions based on high emotions. They're selling out, they absolutely know the market's going to go down, they sell out, then hope to get back in, the market goes up while I wait till it gets back in, I'll wait till I get back there and then they keep waiting and waiting and they miss out tremendous return or I'm also saying this, they sell the market does go down and no, I don't think it's gonna go down further and then missed it. You gotta be so right and then even if you are correct and you get lucky, it's very, very difficult to get back in at some point. So if I'm good, if I get lucky right now and I sell and get back in when it's a little bit lower, guess what I think I can do in the future, Oh well, Im going to sell here and then get back in when it's lower. Eventually, that does not work out, and so the most consistent way I have ever seen is invest in the long run, invest according to your plan, have a diversified portfolio of investments. Jeremy, that's boring, it’s boring but it works. Then take this time and anxiety that you may be having about politics and the environment and focus it on something this small meeting for 2 years in your lives, okay? Spend more time with your family, more time with a hobby, money is really just a tool. It is a tool to do what? For you to live your life. And so if you can, do what you can. Review your plan, make sure to set up right, make sure your investments are set up right and talk to a professional. If you want to talk to me, feel free to give me a call. Once you've got that, live your life. Any questions give me a call, Jeremy Finger, 843-222-6602. Take care!