Middleton Advisory Blog

Election 2016

David Middleton - Monday, November 07, 2016

[This is a record of a mass email and LinkedIN post I published on 11/ 7/16 ]


Hello everyone,

Well, this has been one for the history books.  If you aren't completely fed up with all things election related by now, then perhaps you might be interested to know how your money will be impacted by the results.  The short answer is that no one knows for sure, but there is no reason to be spooked and get off track.  Your investment portfolio should be diversified and balanced enough to hold the course, weather a few bumps, and still meet your goals. This election is just one of many inflection points in time that will impact our portfolios, so a drastic change in plan would not be appropriate. 

That said, I can speculate. The common thread is that a Trump win is less expected by pollsters and would be a surprise.  Since the market does not like surprises, generally speaking, one might expect a mild dip in the short term.  Following this logic, a Clinton win would have a neutral or slightly positive impact.  However, did you know that the stock market itself has shown some historically predictive abilities? When the market is down from July 31st to October 31st in an election year, as it is this election year, the incumbent party is replaced 86% of the time. Very unscientific, but perhaps investors wouldn't be very surprised either way.  We'll find out soon.

Professionally speaking, I believe that U.S. financial markets are more stable and efficient when citizens are engaged and participate in elections, so long as discussion is mostly civil and we try to understand opposing views.  Certainly there is room for improvement on that front.  I hope everyone has found time to do some research about their candidates, both national and local. 

If you haven't already, don't forget to vote!  

David


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