Check out the timestamps below to help you navigate through the many topics we discussed.
On This Episode:
Election season can be a stressful time for many, especially when it comes to financial concerns. The uncertainty of political outcomes often leads to anxiety about the future of the economy and the stock market. But is your fear warranted? Today we’re going to remove the emotion and look at election season from a historical perspective.
This year is certainly interesting because of the Federal Reserve’s rate tightening and the impact it’s had on the economy over the past year. The Federal Reserve uses interest rates to control inflation and manage economic growth and the aggressive rate tightening campaigns of 2022 and 2023 were necessary to bring down the high inflation rates experienced during that period. Understanding these economic mechanisms can help CRNAs make more informed decisions about their investments and financial planning.
Most of the attention right now is on the upcoming presidential election, and every time an election rolls around, it feels more important than the last. The fear is that the other candidate winning will crash the economy and cause volatility in the market. That’s why it’s important to understand historical trends in order to gain perspective. Regardless of whether a Democrat or a Republican wins the election, the market has historically shown resilience and growth over the long term. This is a crucial point for investors to remember, as it highlights the importance of maintaining a long-term perspective and not making hasty decisions based on short-term political events.
Another important aspect of all of this is the role emotions play in financial decision-making. Emotions often drive market volatility, especially during election season. The fear of the unknown and concerns about political outcomes can lead to irrational decisions that may not be in the best interest of one's financial health. That’s why we stress the importance of removing emotion from financial decisions and focusing on logical, rational thinking.
If you find yourself worried about the election and the economy, there are a couple of things you can be doing. First, investors should ensure their portfolios align with their risk tolerance and long-term goals. Second, make sure you’re setting clear financial objectives and sticking to them, regardless of the political climate. This disciplined approach can help mitigate the impact of short-term market fluctuations and provide a sense of stability during uncertain times.
Remember that while election seasons can be stressful, they are just one of many factors that influence the economy. By maintaining a long-term perspective, understanding historical trends, and managing emotions, CRNAs can navigate these periods with greater confidence and peace of mind.
Here’s some of what we discuss in this episode:
- Why the Federal Reserve changes interest rates and will this help prevent a recession?
- An economics lesson and some insight into the factors moving the market in recent months.
- Let’s go all the way back to 1949 and look at how the S&P 500 has reacted to different presidents.
- What returns look like for different parties in the White House and Congress.
- What your investing strategy should be if you’re concerned about the election.
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"I think that markets are really somewhat agnostic when it comes to wins election. Whether it's a Democrat or a Republican, you know, the market really will see its way through it."
- Jeremy Stanley, CFP®
