Can Hillary or Trump really tank your portfolio?

This story is brought to you by Onyx Financial Advisors, an Idaho Falls-based, fee-only investment adviser, which means it does not receive any commissions for the investment recommendations it makes to you. This ensures Onyx represents you with no conflicts of interest.

When you head to the polls to help decide the fate of the country, don’t jump to any conclusions about how the outcome of the election will affect your long-term investments.

During an election month, the pundits go wild with all sorts of predictions of how each candidate’s victory will affect the country. Often, these predictions take the form of doom and gloom and national downfall. And among the predicted affected areas is the stock market. Predictions such as:

• “Stocks will plunge if Donald Trump is elected president. And the bond market could capsize if Trump goes ahead with plans to renegotiate the national debt.”
• “If Hillary Clinton wins the White House, she’ll cripple the economy by hiking taxes by $1 trillion.”

And yes, it’s scary. One of the things that makes it so difficult to let long-term investments ride is that the short-term has such potential to be unexpectedly volatile.

And to be honest, unanticipated surprises do occur. It’s also true that current market prices reflect the expectation of where stocks will go (meaning they attempt to predict the future based on a variety of factors). And today, one huge factor is the outcome and impact of elections.

But investors can’t know the nature of these surprises, and it’s unlikely that investors will make money trying to predict what will happen to the stock market after a presidential election.

In fact, looking at stock market returns during election months from 1926 to today, they have always fallen well within the typical range of returns … and that’s despite which party won.

According to the financial site Money, “while the inhabitant of 1600 Pennsylvania Avenue can alter the lives of billions of people, history says presidential politics have a surprisingly small impact on your portfolio.”

Not only that, but Kiplinger, a publication focused specifically on business forecasts, states, “You may feel strongly about one party or the other when it comes to your politics, but when it comes to your portfolio, it doesn’t matter much which party wins the White House.”

So of all the things to think about and stress about and debate about over the next month, perhaps your investments can take a breather.