The number one question I am asked today regards how the election will affect investors. This election cycle has been unpredictable and I suspect more surprises are possible. There are even conceivable scenarios under which the final winner is not even currently running.
Two months ago the Department of Labor prepared to issue its new Fiduciary ruling and the whole investing world was worried about what it might contain. I had the privilege of being with a key industry player the day the rule was issued. I asked him what we would do if it came out negatively. He calmly reminded me that regardless of the ruling, businesses would find a way to work through it and not only survive, but thrive.
“That’s what businesses do,” he said. I could relate to his comments because in my own career, many times I have had to make adjustments to a constantly changing world.
I have personal feelings about who should be our next president. But in the end I do not believe the person who sits in the white house can be shown historically to be a consistent negative or positive to the investing markets, they are just different, and businesses can adjust and make profits, even if things are different.
Bill Clinton likes to remind us that he presided over the economic boom of the late 90’s. Clinton was also president during the horrible stock market crash of 2000. Did he cause that as well? Is it more likely that the boom of the 90’s was artificially created by investor’s “irrational exuberance” in running up stock prices, which same behavior led to the eventual crash? George Bush 43 is criticized for causing the recession of 2008, but for the prior several years our markets and economy were quite strong. Was he the cause of both? Did he personally cause the sub-prime mortgage mess that led to the recession or was it more likely caused by regular Americans borrowing more than they could reasonably pay back? The past seven years have seen remarkable stock market returns for investors. Would someone like to make the case that an admittedly anti-business president Obama has been good for the stock market?
I have invested under six presidents and each has been very different. I have learned that, as an investor, I invest in businesses whose goal is to provide products and services the world will want to buy. Politicians can change the rules and they can even be adversarial, but in the end, businesses find a way to work through it and find a positive outcome. Rather than try to handicap the outcome of the 2016 elections, which I believe is a fool’s errand, focus on investing in businesses and services you believe the world will continue to want, regardless of who sits in the White House.
It is very important who we elect as our president, but from a purely investor point of view, in the current campaign, I am not sure either party is all that much different.
Hi, I'm Dan. I'm a CFP® Professional.
Securities and advisory services offered through Commonwealth Financial Network®.
Member www.finra.org / www.sipc.org , a Registered Investment Advisor. Wyson Financial, 1173 S. 250 W. Suite 505, St. George, UT 84770.
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