Headlines often connect political leadership with market performance, and it’s easy to wonder: Does who is in the White House affect my retirement savings?
If you’ve asked that question, you’re not alone.
In our latest video I interview Mike Greim regarding what historical data shows about markets under different presidential administrations, what truly influences long‑term investment outcomes, and why trying to react to political news can pull investors off course. Our goal is simple: help you stay focused on your plan, not on the headlines.
Watch this short video to learn how to make steady, informed financial decisions regardless of who holds the White House.
Transcript
Chad: Have you ever wondered if you should change your investments depending on who’s in the White House? Lately, it seems like every headline is predicting a financial disaster or a financial boom.
Hi, I’m Chad Chase with CGN Advisors. Today, Mike Grime is joining me to talk a little bit about what really matters for your portfolio.
Does the President Impact the Market?
Chad: So, Mike, let me ask you a few questions. Does the president and who’s in the White House really affect the market and the economy and ultimately portfolio values?
Mike: Well, Chad, that’s a great question. I do get that quite a bit. Generally speaking, you know, the market is influenced by many forces. It’s not just influenced by one person. Certainly the president and the administration can influence policy in the near term, which oftentimes can lead to short-term reactions.
But oftentimes we think that longer-term outcomes are focused more on fundamentals. So really, we think the biggest risk for investors is having fear-based adjustments to their portfolios. And overall, we think it’s important to focus on building a plan and having your investment portfolio fit with that or have good alignment with that plan.
Do Political Parties Affect Investment Performance?
Chad: Maybe I’ll take this a little step further. When people talk about politics and whatnot, do political parties matter; who might be in charge of the White House or Congress or anything like that that would have an effect on the economy?
Mike: Yeah, you know, that’s interesting. It’s a popular narrative that I see. And there’s been a lot of research done on this.
Certainly, you know, there have been times where markets have done better under one president or another. But the research shows over time that, generally speaking, markets go up under either political party. What we also find is that trying to avoid investing during one political party or another political party can actually lead to detrimental returns. And so really, what we find is staying invested for the long term is really the best opportunity.
Emotional Investment Decisions and Mistakes to Avoid
Chad: So what do you think are the biggest mistakes that people make because of political headlines?
Mike: Really kind of making big changes and letting maybe your emotions take hold. And, you know, it’s easy to see why that can happen. But making large changes like going to cash for big periods of time until things calm down is what I often hear, which is then it’s hard to figure out when’s the right time to get back in or chasing hot sectors. So adjusting your portfolio that’s intended for the long term to try to catch some sort of a hot sector or theme is often something that creates additional risk.
Also, ignoring taxes and getting away from what your actual risk tolerance has a long-term effect.
Practical Steps When Political Headlines Cause Anxiety
Chad: So if someone is feeling nervous right now after reading the political headlines, what are maybe two or three things, practical things they can do right now?
Mike: I think first of all, you know, kind of step back, take a breath. Maybe try to zoom out a little bit and take a longer-term view, knowing that certainly markets can become volatile in the near term. And they generally are.
It’s easy to forget that markets go through corrections in most calendar years, regardless of what’s going on in the political environment. So just kind of taking a break and taking a step back.
And instead of reacting to the news, look for opportunities, maybe rebalance your portfolio. We think that that’s one of the tools we can utilize that has a large influence on results over time. You’re rebalancing back toward your long-term targets.
It might make sense to have some adjustments from our perspective with inside asset classes based upon where policy might be headed from a longer-term perspective. But unless you have clear evidence that suggests you should do something different, rebalancing back to your long-term targets.
Keep Cash for Short-Term Needs and Review Your Plan
Mike: The other thing is you always should have enough cash on hand for your short-term needs. We often get folks who are worried about trying to invest their cash that they need for short-term purposes and trying to stretch for yield or investment return in something that actually requires taking on risk and really is intended for a longer-term investment. So we avoid those types of things.
And check in with your advisor to make sure your risk level is still appropriate and it still matches your plan. So really going back and focusing on what your plan says. That’s really the best route.
Return to Your Financial Plan in Uncertain Times
Chad: Yeah, I think that’s true, Mike. Really coming back to the comprehensive financial plan that’s been built and designed for you with your advisor can really be a calming effect during these uncertain times. So I appreciate your time, Mike.
I’m Chad Chase with CGN Advisors and if you’d like help with your strategy, please reach out to us. Our phone number is 785-340-3434 or you can find us on the web at www.cgnadvisors.com.
Thanks for watching.