The Certain Uncertainty of the Presidential Election
With just under a week to go until the November 8th presidential election, there is one thing Democrats, Republicans, Libertarians, Greens, moms, dads, kids, entrepreneurs, executives, employees, doctors, lawyers, dentists, and anyone not covered by those categories can agree on:
We’re all nervous. And it’s easy to see why.
The stakes for this election seem higher, and the rhetoric regarding the candidates and the consequences of their election seem more dire than ever.
But before you start stockpiling the rice, beans, and bullets, here are a few things to remember.
1. Nervousness before an American presidential election is about as old as…well, presidential elections.
According to The Stock Trader’s Almanac, since 1833 the Dow Jones Industrial Average has gained an average of 10.4% in the year before a presidential election, and 6%, on average, during the election year.
Economic slowdowns are a presidential year tradition.
However, presidential elections do create a lot of unknowns, and it’s only wise to approach the unknown with caution.
What isn’t wise is to let caution and concern morph into unreasonable fear. There is truth to Franklin Delano Roosevelt’s famous quote, “The only thing we have to fear is fear itself.”
Fear can push us into irrational behavior, or inaction that can result in disaster.
Nervousness before an election is an appropriate reaction to uncertainty. But uncertainty is not an excuse to panic. Or to freeze up.
2. The presidential election is going to happen no matter how nervous you get…so start creating a strategy.
Pundits—both the professional kind and the kind that can be found on barstools and pews—have been predicting the end of the Republic since Thomas Jefferson’s supporters called John Adams, “A hideous hermaphroditical character, which has neither the force and firmness of a man, nor the gentleness and sensibility of a woman.”
The Republic survived John Adam’s camp responding with the assertion that Jefferson was, “A mean-spirited, low-lived fellow, the son of a half-breed Indian squaw, sired by a Virginia mulatto father.”
The Republic will survive whatever happens November 8th.
However, the results of November 8th will impact all of us, including businesses and markets.
How will those changes impact your financial assets? While it’s impossible to know that answer with complete certainty, what you need to do is…
3. Seek an expert, create a strategy…and have a little faith.
I entered the financial planning business in 1981.
That means this will be my 9th presidential cycle in this industry. I’ve heard it all, and seen a lot.
People claiming that (fill in the candidate) will be the end of us all. A presidential election decided by the Supreme Court. A financial meltdown. Multiple recessions. Multiple booms.
Of course, you may have experienced those events too, but by working in the financial sector a few things regarding presidential elections become very clear:
You need to relax and take a breath, and remember that there is a grander plan, and this election, whatever the result, is a part of that plan.
You need a strategy to guide your financial decision making, because from an investment perspective we’ve always had good markets and bad markets – the key is knowing which strategy to apply in various market conditions.
You need to work with a trusted financial advisor who understands your goals, your values, your aspirations, and your vision.
Take a moment and reread that list. How is that different than how you face life and your finances on a daily basis?
Uncertainty about the future isn’t restricted to elections.
In fact, there is another name for uncertainty: life.
We are just human beings. We can’t see the grander plan we’re all a part of. That’s true in any year, it’s just that in election years the normal uncertainty of life becomes another story for the media to cover.
And if you’re reading this, you’re not the type who will let the uncertainty of life get the best of you.
You’re the type that will take action.
So rather than worry about November 8th, spend your energy building a plan that can withstand tomorrow.
Visit your advisor. Build your strategy.
And start creating the best possible future for you and your family.