LA Wealth Management Q4 2020 - The market and the election - what to do?

The market and the election - what to do?

This Quarter we want to ask the question, “Is it wise to be invested in the stock market right now, in light of the upcoming election.” That has without a doubt been the biggest question I have been asked over the last several months. While nobody has a crystal ball, and we never know what the future will hold, our beliefs are that it’s rarely (if ever) advantageous to try to time the market and most of us (professionals included) can’t regularly and accurately time the market.

The Capital Group recently put out an article addressing this very thing and we thought it was worth a read:

https://www.capitalgroup.com/advisor/insights/articles/3-investor-mistakes-election-year.html

Here are the key takeaways:

·       Election results have had very little impact on long-term investors.  History shows that markets have risen whether a Republican or a Democrat has been in office.

·       Markets have been more volatile during primary season but tended to rise strongly thereafter.  It’s important to stay the course through the primary season to benefit from any potential rally once the final candidates and an eventual winner emerges.

·       Investors often sit on the sidelines during election years out of fear and uncertainty, but that’s rarely a winning strategy. Net asset flows into money market funds have been more than three times higher in election years than in non-election years.

·       Investors who were fully invested or made monthly investments did better than those who stayed in cash. The key is to avoid trying to time markets around politics!

Now for some non-financial news:

On October 31st, this Halloween, we will have a full moon. This is rare on Halloween and, in addition, it will also be a blue moon. This particular moon is also called Hunter’s Moon.  On another astrological note, we will have a meteor shower in the late evening of October 9th and the pre-dawn hours of October 21-22. Take a second to look up and admire and best of luck seeing any meteors if you feel like giving that a go!

As always, please let me know if you have any questions, I’m always happy to help you and anyone that you love.

Jeremy Leibowitz, CFP & Laurie Allen, CPF