October 30, 2024 • 17 mins
Questions? Thoughts? Send a Text to The Optometry Money Podcast!
What do presidential elections mean for your investments? What actions should you take during an election year?
In this rewind of a popular episode, Evon provides context for this common question by diving into the historical behavior of US stocks related to US presidential elections. He dives both into the short-term results - looking at the months and years around the elections, as well as a longer-term perspective. Ultimately, stocks - publicly traded businesses - have rewarded long-term, patient investors over long-term periods of time, regardless of the politician in office.
Have questions on anything discussed or want to have topics or questions featured on the show? Send Evon an email at podcast@optometrywealth.com.
Check out www.optometrywealth.com to get to know more about Evon, his financial planning firm Optometry Wealth Advisors, and how he helps optometrists nationwide. From there, you can schedule a short Intro call to share what's on your mind and learn how Evon helps ODs master their cash flow and debt, build their net worth, and plan purposefully around their money and their practices.
Resources mentioned on this episode:
- Slides: Market Returns During Elections
- DFA's Presidential Elections: What Do They Mean for Markets?
- DFA: How Much Impact Does the President Have on Stocks? (Interactive)
- DFA Webcast Highlights: What History Tells Us About Elections and the Market
- A Wealth of Common Sense: Don't Mix Your Politics With Your Portfolio
The Optometry Money Podcast is dedicated to helping optometrists make better decisions around their money, careers, and practices. The show is hosted by Evon Mendrin, CFP®, CSLP®, owner of Optometry Wealth Advisors, a financial planning firm just for optometrists nationwide.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Evon (00:00):
Hey, everybody hope you enjoy this episode, I recorded
(00:02):
earlier this year all about whathistory has to show us about how
presidential elections anddifferent political parties
impact your investments.
And hopefully it helps you tostay calm and collected and
lower your stress aroundinvestments as we approach
election day and helps you tostay disciplined toward a
long-term investment approachthat hopefully you're following.
(00:24):
Please reach out if you have anyquestions in the meantime, enjoy
the episode.
Hey, everybody.
Welcome back to The OptometryMoney Podcast where we're
helping ODs all over the countrymake better and better decisions
around their money, theircareers, and their practices.
I am your host, Evon Mendrin,Certified Financial Planner(TM)
(00:45):
practitioner, and owner ofOptometry Wealth Advisors.
Thank you so much for listeningtoday.
And today's episode reallyappreciate your time and
attention.
And today we're diving into atopic that's probably on many of
your minds, the presidentialelection, and it's almost
impossible to avoid the topicssince it's a presidential
(01:05):
election year.
And we have two very, we'll sayanimating candidates for
presidency this year and oureyes and ears are full of
political ads and news, and justother stuff from just about
everywhere, all about politicsand the election.
But we're not going to talkabout politics.
I promise.
(01:26):
Don't worry.
Don't worry.
We're going to talk aboutwhether politics should be mixed
with your investment decisions.
How elections impact ourinvestments.
Especially as we navigatethrough yet another election
year.
And it's an unfortunate truththat with elections come a lot
of polarization and negativityand really high emotions.
(01:50):
And stress and a natural part ofthat is questions about how
elections impact investments.
Many of these questions carry asense of fear.
Fear of what a certain candidatewill do to your investments or
fear of not taking action beforethat happens.
Fear of articles you've seen onthe internet about the certain
(02:11):
doom and gloom to come.
And my own observation is thatwhenever there's something
outside of our control, thatcauses us stress.
Much like elections.
I mean, because ultimately whowins and what their policies
will end up being and how thatimpacts us on a day-to-day life.
It's largely out of ourindividual control.
(02:32):
So my observation is thatwhenever there's something
outside of our control, thatcauses us stress we try to go
somewhere that is within ourcontrol.
And I think we feel that ourinvestments are one of those
things that are directly withinour control, that if only we
tinker enough if only we maketrades before to prepare for the
(02:53):
next president we can be betteroff.
and there are again, no shortageof pundits and so-called experts
with all sorts of doom and gloompredictions of stock market
crashes, regardless of who endsup in office.
And of course are usuallyentirely wrong.
So rather than think about justmy opinion.
(03:14):
I want to dive into real data,actual historical data and try
to determine whether there isany relevance of presidential
elections to our investments andwhether we should take action
because it's an election year.
So with that, let's dive on in.
And let's start with theconclusion first.
All right.
I'm going to just going to readto the end of the story here.
(03:35):
Here's the good news.
History shows that regardless ofwhich presidential party is in
office businesses, stocks havecontinued to provide a positive
return for shareholders overtime.
So that's the good news.
That's sort of the conclusion.
If you had to step away from thepodcast and just take one thing,
that's it.
(03:55):
Right.
So let's break this down alittle bit more.
First.
Let's remember to think aboutmarkets as powerful information
processing machines.
Right.
They're pretty efficient.
Like they're just gobbling upnew information as it's coming
in.
All of the thousands and maybemillions of investors all over
(04:16):
the place are just taking allthis information in and applying
it to their buying and sellingdecisions.
And the combined impact ofmillions of investors placing
billions of dollars worth oftrades each and every day
results in market prices thatalready incorporate sort of the
collective expectations of allthese investors of what the
(04:39):
future of these stocks, thesebusinesses might look like.
So this makes consistently outguessing the market price pretty
difficult.
I mean, if we think we have someinkling that a certain.
presidential candidates going todo something certain to the
stock market.
Or they're going to impact acertain business a certain way.
Well, it's very likely the restof the market I mean, in
(05:00):
aggregate all the otherinvestors, most of which are
going to be professional orinstitutional investors.
Are already factoring that intothe prices here.
Right.
So we don't have anyinformational advantages.
But let's, let's dive into thedata here.
So let's look at how US stocks.
Here, we're using the S&P 500.
So really the, the largest USstocks, but a good enough proxy
(05:23):
for this conversation.
We're going to look at how USstocks as shown by the S&P 500.
Behaved during actual months ofelections.
The the months of the electionsthemselves.
And this is probably when thecollective emotions of, of
everyone are highest right asthe elections about to happen.
(05:43):
And.
Data for the stock market, goingback to 1926 through 2023.
Shows that returns in monthswhen presidential elections are
happening when the actualelections took place have not
tended to be that much differentfrom returns in any other month.
There's no discernible pattern.
(06:04):
When, when looking at thereturns of the months of
elections versus the returns ofall other months.
If you look at, if you pile upall the returns in the car, look
at the distribution.
There's really no pattern here.
Right?
So there is no discernibledifference between election
months and non-election months.
Well, let's zoom out a littlebit.
All right.
So instead of months, let's takea look at the whole year of the
(06:25):
election.
So we've zoomed out a little bitAnd this time starting from 1929
through 2023.
And while we certainly see upsand downs throughout history.
most of the years are positive,which really isn't different
from the historical percentagesof all years.
Most years historically arepositive.
I'm looking at all of theelection years from all the way
(06:49):
from Hoover through PresidentBiden.
Of the average return of anelection year.
Is 11.57%.
Not bad, right?
I mean, that's pretty much whatyou would see close to on
average anyways.
So the, the typical or averageexperience during a typical or
average election year, Is verypositive or has historically
(07:12):
been positive.
Roughly around 11%.
And what about the year afterthe election?
Because a lot of times we see anew candidate come in.
They come in later in the yearand we're expecting them to have
an immediate impact on the stockmarket.
Right.
We're saying, Hey, thispresidential candidate is in, we
know the stock, market's goingto decline the next year.
(07:32):
Well, let's take a look.
Let's take a look at the returnsof the stock market in the U S.
The year after the election.
And so the average return of theyear after in election year, Has
been about 10.67% still prettypositive, and pretty close to
the average annual returnanyways.
Right.
So really nothing significantabout election years on average.
(07:54):
So when it comes to the years ofelection and the years after
elections, there really isn'tanything significant about those
years on average.
So now let's zoom out a littlemore.
How have us stocks behave duringthe entire term.
Of all of these differentpresidents, right?
So rather than just the electionyear or the year after, how has
(08:17):
the US stock market behavedduring the entire term of these
US presidents?
So again from 1929 through 2023.
The average return for a througha whole US presidential term.
Was 9.5%.
Not too bad.
Right?
When we look at all thesedifferent presidents from
Herbert Hoover, through all theway through Joe Biden.
(08:39):
And when we look at thepresidential parties, what we
see is realistically there isn'tmuch of a difference between
different parties that are inoffice in terms of the returns
that you see.
outside of the great depression,I mean, the great depression was
sort of an anomaly there.
But outside of the greatdepression, you don't really see
this discernible pattern, mostof them are pretty similar.
(08:59):
And within the U S bond marketso leaving from stocks to bonds
we actually see a pretty similarpattern as well.
And what's interesting goingback to the stock market.
What's interesting is that.
There also, hasn't been apresident.
That has avoided losses eitherduring their term.
Going all the way back again toHerbert Hoover in 1929.
(09:21):
each president has seen a doubledigit decline during their
presidency.
with a pretty wide range ofdeclines through the great
depression with Hoover wasnegative 86%, right.
Pretty hard to imagine, but wesaw negative 86% during the
great depression.
We saw a negative 51% during,the Bush era.
(09:41):
we saw negative 16% with Carteris a pretty wide range, but each
presidential term has seen itsfair share of.
double digit, double digitdeclines.
No president has been shieldedfrom that.
And then finally we can zoom outeven more, right.
Rather than looking atpresidential terms, we can look
at the longer term averagereturns.
(10:03):
And when we look out evenfurther, We see that the US
stock market has providedpositive longterm returns,
regardless of the different mixof presidential parties
throughout history.
there's a great chart fromDimensional Fund Advisors and
there's great resources that I'mgoing to add into the show notes
for all these different pointsI'm making, but there's a great
(10:23):
chart from Dimensional FundAdvisors showing the longterm
returns over time.
through different parties in theoval office I'm going to have
that in the show notes.
But when we look from 1926through 2023, what we see is
that the average annual rate ofreturn for the S&P 500.
Was just over 10% when includingdividends.
(10:45):
Ups and downs along the way.
Of course, especially in theshort term.
But what we've seen over longperiods of time is that stock
markets reward long-terminvestors over time.
And this is the real takeaway.
You know, unless you areinvesting specifically for a
short-term goal.
We're long-term investors.
And we need to keep our point ofview, our expectations, our
(11:08):
thinking.
Over what we expect to happenover decades.
I mean, our investment timehorizons are 20 and 30, 40, 50
years over the rest of ourlives.
And so we have to keep that inmind, our.
Our point of view, when thinkingabout return expectations and
the behavior of these markets.
Has to be as a longterminvestor.
(11:30):
And what we've seen is thatmarkets have rewarded
disciplined patient long-terminvestors, regardless of the.
the politicians in office,Congress, we actually see pretty
similar results, regardless ofconflicts, regardless of
economic events throughout timefor those long-term investors
(11:51):
who have continued to stayinvested patiently, diligently.
And especially continuing toinvest as those uncomfortable
moments are happening.
We see that markets haverewarded those investors
historically.
And while we can't say, thathistory is going to guarantee
that the same thing happens intothe future.
(12:12):
History gives us reasonableexpectations, a reasonable range
of outcomes.
So, what does this mean for you?
Right.
Let's get down to theconclusions again here.
What does this mean for you?
Well, it's, it's critical, it'scrucial to remember what it is
you actually own when we'retalking about the stock market.
You own either directly orindirectly through mutual funds
(12:35):
and ETFs shares of actualbusinesses.
Apple, Disney, Walmart, HomeDepot, Toyota.
I mean, we, we own shares ofactual real businesses.
You're invested broadly inbusinesses and entrepreneurship.
And human innovation andingenuity.
(12:56):
Not in presidents and not inpolitical parties.
That's really important.
That's critical.
Ultimately businesses willcontinue to do what they need to
do to provide goods and servicesto customers.
Earn a profit and ultimatelyprovide positive returns over
time for shareholders.
Regardless of what's happeningin the meantime.
(13:17):
And they'll do this regardlessof who is in office.
And also remember that you arelikely, especially if you are
one of our clients listening.
you are likely globallydiversified across thousands of
publicly traded companies allover the world.
And global diversification helpsto diversify risks, unique to a
(13:37):
particular country or region.
Whether it's economic, whetherit's currency related, political
risks, conflicts, wars.
Especially long, drawn outdeclines, unique to one country
or region.
That's the purpose that that'swhat we want out of global
diversification.
So while politics does tend tobe heated topic and we have
(14:00):
especially divisive candidatesfor this election in 2024,
mixing politics with investmentdecisions is very likely going
to be a bad decision.
Stock markets are way biggerthan one man.
And while presidents can impactpolicy.
And can in some ways impact theeconomy.
Ultimately presidents, in myopinion, get way too much blame
(14:25):
when markets decline.
And way too much credit whenmarkets are positive.
And I think they take too muchcredit when markets are
positive.
And when the truth ispoliticians have far less
control over the stock marketthan most people want to
believe.
And much of it has to do withthe context that the president
is stepping into or what'shappening during their
(14:46):
presidency that's actuallyoutside of the control.
Bill Clinton and Ronald Reagantook office at opportune times
during one of the biggest bullmarkets in history.
And we'll look at Roosevelt, forexample, Roosevelt's time and
office was.
started with the greatdepression and ended in World
War II.
George W bush had 9-11 happenedduring presidency.
(15:08):
And at the end of hispresidency, we saw the Great
Financial Crisis.
Obama stepped in during theGreat Financial Crisis kind of
timing the bottom.
They're seeing a substantialbull market from there on.
We saw COVID happened recently.
I mean, a lot of this is justthe historical context
economically or just with, orpolitically that's happening
(15:29):
around the presidency.
As they're stepping in office.
Much of this out of their directcontrol.
So as we wrap up today'sepisode, I want to leave you
with this thought.
Stay focused on your long-terminvestment strategy.
And try not to get swayed by thenoise of election year rhetoric
or really the noise of theheadlines any other year.
(15:52):
Historically markets have shownresilience and growth throughout
various political landscapes.
So take a deep breath.
Stay the course.
Focus on what's actually withinyour control, increasing your
income, increasing your savingsrate, the amount that you are
adding, contributing, andinvesting over time.
And trust in the power ofmarkets over the long haul.
(16:14):
And with that really appreciateyour time.
I'm going to have all theresources I mentioned in this
episode, in the show notes,which you can find at the
education hub at my website,www.optometrywealth.com.
And while you're there, pleasecheck out all the other
resources and episodes we'vedone.
As well as feel free to schedulea no commitment introductory
call, and we can talk aboutwhatever's on your mind
(16:37):
financially.
And we can talk about how I helpoptometrist all over the country
solve those same financialconcerns and more.
And with that, we'll catch youon the next episode.
In the meantime, take care.
Hey, everybody hope you enjoy this episode, I recorded
(00:02):
earlier this year all about whathistory has to show us about how
presidential elections anddifferent political parties
impact your investments.
And hopefully it helps you tostay calm and collected and
lower your stress aroundinvestments as we approach
election day and helps you tostay disciplined toward a
long-term investment approachthat hopefully you're following.
(00:24):
Please reach out if you have anyquestions in the meantime, enjoy
the episode.
Hey, everybody.
Welcome back to The OptometryMoney Podcast where we're
helping ODs all over the countrymake better and better decisions
around their money, theircareers, and their practices.
I am your host, Evon Mendrin,Certified Financial Planner(TM)
(00:45):
practitioner, and owner ofOptometry Wealth Advisors.
Thank you so much for listeningtoday.
And today's episode reallyappreciate your time and
attention.
And today we're diving into atopic that's probably on many of
your minds, the presidentialelection, and it's almost
impossible to avoid the topicssince it's a presidential
(01:05):
election year.
And we have two very, we'll sayanimating candidates for
presidency this year and oureyes and ears are full of
political ads and news, and justother stuff from just about
everywhere, all about politicsand the election.
But we're not going to talkabout politics.
I promise.
(01:26):
Don't worry.
Don't worry.
We're going to talk aboutwhether politics should be mixed
with your investment decisions.
How elections impact ourinvestments.
Especially as we navigatethrough yet another election
year.
And it's an unfortunate truththat with elections come a lot
of polarization and negativityand really high emotions.
(01:50):
And stress and a natural part ofthat is questions about how
elections impact investments.
Many of these questions carry asense of fear.
Fear of what a certain candidatewill do to your investments or
fear of not taking action beforethat happens.
Fear of articles you've seen onthe internet about the certain
(02:11):
doom and gloom to come.
And my own observation is thatwhenever there's something
outside of our control, thatcauses us stress.
Much like elections.
I mean, because ultimately whowins and what their policies
will end up being and how thatimpacts us on a day-to-day life.
It's largely out of ourindividual control.
(02:32):
So my observation is thatwhenever there's something
outside of our control, thatcauses us stress we try to go
somewhere that is within ourcontrol.
And I think we feel that ourinvestments are one of those
things that are directly withinour control, that if only we
tinker enough if only we maketrades before to prepare for the
(02:53):
next president we can be betteroff.
and there are again, no shortageof pundits and so-called experts
with all sorts of doom and gloompredictions of stock market
crashes, regardless of who endsup in office.
And of course are usuallyentirely wrong.
So rather than think about justmy opinion.
(03:14):
I want to dive into real data,actual historical data and try
to determine whether there isany relevance of presidential
elections to our investments andwhether we should take action
because it's an election year.
So with that, let's dive on in.
And let's start with theconclusion first.
All right.
I'm going to just going to readto the end of the story here.
(03:35):
Here's the good news.
History shows that regardless ofwhich presidential party is in
office businesses, stocks havecontinued to provide a positive
return for shareholders overtime.
So that's the good news.
That's sort of the conclusion.
If you had to step away from thepodcast and just take one thing,
that's it.
(03:55):
Right.
So let's break this down alittle bit more.
First.
Let's remember to think aboutmarkets as powerful information
processing machines.
Right.
They're pretty efficient.
Like they're just gobbling upnew information as it's coming
in.
All of the thousands and maybemillions of investors all over
(04:16):
the place are just taking allthis information in and applying
it to their buying and sellingdecisions.
And the combined impact ofmillions of investors placing
billions of dollars worth oftrades each and every day
results in market prices thatalready incorporate sort of the
collective expectations of allthese investors of what the
(04:39):
future of these stocks, thesebusinesses might look like.
So this makes consistently outguessing the market price pretty
difficult.
I mean, if we think we have someinkling that a certain.
presidential candidates going todo something certain to the
stock market.
Or they're going to impact acertain business a certain way.
Well, it's very likely the restof the market I mean, in
(05:00):
aggregate all the otherinvestors, most of which are
going to be professional orinstitutional investors.
Are already factoring that intothe prices here.
Right.
So we don't have anyinformational advantages.
But let's, let's dive into thedata here.
So let's look at how US stocks.
Here, we're using the S&P 500.
So really the, the largest USstocks, but a good enough proxy
(05:23):
for this conversation.
We're going to look at how USstocks as shown by the S&P 500.
Behaved during actual months ofelections.
The the months of the electionsthemselves.
And this is probably when thecollective emotions of, of
everyone are highest right asthe elections about to happen.
(05:43):
And.
Data for the stock market, goingback to 1926 through 2023.
Shows that returns in monthswhen presidential elections are
happening when the actualelections took place have not
tended to be that much differentfrom returns in any other month.
There's no discernible pattern.
(06:04):
When, when looking at thereturns of the months of
elections versus the returns ofall other months.
If you look at, if you pile upall the returns in the car, look
at the distribution.
There's really no pattern here.
Right?
So there is no discernibledifference between election
months and non-election months.
Well, let's zoom out a littlebit.
All right.
So instead of months, let's takea look at the whole year of the
(06:25):
election.
So we've zoomed out a little bitAnd this time starting from 1929
through 2023.
And while we certainly see upsand downs throughout history.
most of the years are positive,which really isn't different
from the historical percentagesof all years.
Most years historically arepositive.
I'm looking at all of theelection years from all the way
(06:49):
from Hoover through PresidentBiden.
Of the average return of anelection year.
Is 11.57%.
Not bad, right?
I mean, that's pretty much whatyou would see close to on
average anyways.
So the, the typical or averageexperience during a typical or
average election year, Is verypositive or has historically
(07:12):
been positive.
Roughly around 11%.
And what about the year afterthe election?
Because a lot of times we see anew candidate come in.
They come in later in the yearand we're expecting them to have
an immediate impact on the stockmarket.
Right.
We're saying, Hey, thispresidential candidate is in, we
know the stock, market's goingto decline the next year.
(07:32):
Well, let's take a look.
Let's take a look at the returnsof the stock market in the U S.
The year after the election.
And so the average return of theyear after in election year, Has
been about 10.67% still prettypositive, and pretty close to
the average annual returnanyways.
Right.
So really nothing significantabout election years on average.
(07:54):
So when it comes to the years ofelection and the years after
elections, there really isn'tanything significant about those
years on average.
So now let's zoom out a littlemore.
How have us stocks behave duringthe entire term.
Of all of these differentpresidents, right?
So rather than just the electionyear or the year after, how has
(08:17):
the US stock market behavedduring the entire term of these
US presidents?
So again from 1929 through 2023.
The average return for a througha whole US presidential term.
Was 9.5%.
Not too bad.
Right?
When we look at all thesedifferent presidents from
Herbert Hoover, through all theway through Joe Biden.
(08:39):
And when we look at thepresidential parties, what we
see is realistically there isn'tmuch of a difference between
different parties that are inoffice in terms of the returns
that you see.
outside of the great depression,I mean, the great depression was
sort of an anomaly there.
But outside of the greatdepression, you don't really see
this discernible pattern, mostof them are pretty similar.
(08:59):
And within the U S bond marketso leaving from stocks to bonds
we actually see a pretty similarpattern as well.
And what's interesting goingback to the stock market.
What's interesting is that.
There also, hasn't been apresident.
That has avoided losses eitherduring their term.
Going all the way back again toHerbert Hoover in 1929.
(09:21):
each president has seen a doubledigit decline during their
presidency.
with a pretty wide range ofdeclines through the great
depression with Hoover wasnegative 86%, right.
Pretty hard to imagine, but wesaw negative 86% during the
great depression.
We saw a negative 51% during,the Bush era.
(09:41):
we saw negative 16% with Carteris a pretty wide range, but each
presidential term has seen itsfair share of.
double digit, double digitdeclines.
No president has been shieldedfrom that.
And then finally we can zoom outeven more, right.
Rather than looking atpresidential terms, we can look
at the longer term averagereturns.
(10:03):
And when we look out evenfurther, We see that the US
stock market has providedpositive longterm returns,
regardless of the different mixof presidential parties
throughout history.
there's a great chart fromDimensional Fund Advisors and
there's great resources that I'mgoing to add into the show notes
for all these different pointsI'm making, but there's a great
(10:23):
chart from Dimensional FundAdvisors showing the longterm
returns over time.
through different parties in theoval office I'm going to have
that in the show notes.
But when we look from 1926through 2023, what we see is
that the average annual rate ofreturn for the S&P 500.
Was just over 10% when includingdividends.
(10:45):
Ups and downs along the way.
Of course, especially in theshort term.
But what we've seen over longperiods of time is that stock
markets reward long-terminvestors over time.
And this is the real takeaway.
You know, unless you areinvesting specifically for a
short-term goal.
We're long-term investors.
And we need to keep our point ofview, our expectations, our
(11:08):
thinking.
Over what we expect to happenover decades.
I mean, our investment timehorizons are 20 and 30, 40, 50
years over the rest of ourlives.
And so we have to keep that inmind, our.
Our point of view, when thinkingabout return expectations and
the behavior of these markets.
Has to be as a longterminvestor.
(11:30):
And what we've seen is thatmarkets have rewarded
disciplined patient long-terminvestors, regardless of the.
the politicians in office,Congress, we actually see pretty
similar results, regardless ofconflicts, regardless of
economic events throughout timefor those long-term investors
(11:51):
who have continued to stayinvested patiently, diligently.
And especially continuing toinvest as those uncomfortable
moments are happening.
We see that markets haverewarded those investors
historically.
And while we can't say, thathistory is going to guarantee
that the same thing happens intothe future.
(12:12):
History gives us reasonableexpectations, a reasonable range
of outcomes.
So, what does this mean for you?
Right.
Let's get down to theconclusions again here.
What does this mean for you?
Well, it's, it's critical, it'scrucial to remember what it is
you actually own when we'retalking about the stock market.
You own either directly orindirectly through mutual funds
(12:35):
and ETFs shares of actualbusinesses.
Apple, Disney, Walmart, HomeDepot, Toyota.
I mean, we, we own shares ofactual real businesses.
You're invested broadly inbusinesses and entrepreneurship.
And human innovation andingenuity.
(12:56):
Not in presidents and not inpolitical parties.
That's really important.
That's critical.
Ultimately businesses willcontinue to do what they need to
do to provide goods and servicesto customers.
Earn a profit and ultimatelyprovide positive returns over
time for shareholders.
Regardless of what's happeningin the meantime.
(13:17):
And they'll do this regardlessof who is in office.
And also remember that you arelikely, especially if you are
one of our clients listening.
you are likely globallydiversified across thousands of
publicly traded companies allover the world.
And global diversification helpsto diversify risks, unique to a
(13:37):
particular country or region.
Whether it's economic, whetherit's currency related, political
risks, conflicts, wars.
Especially long, drawn outdeclines, unique to one country
or region.
That's the purpose that that'swhat we want out of global
diversification.
So while politics does tend tobe heated topic and we have
(14:00):
especially divisive candidatesfor this election in 2024,
mixing politics with investmentdecisions is very likely going
to be a bad decision.
Stock markets are way biggerthan one man.
And while presidents can impactpolicy.
And can in some ways impact theeconomy.
Ultimately presidents, in myopinion, get way too much blame
(14:25):
when markets decline.
And way too much credit whenmarkets are positive.
And I think they take too muchcredit when markets are
positive.
And when the truth ispoliticians have far less
control over the stock marketthan most people want to
believe.
And much of it has to do withthe context that the president
is stepping into or what'shappening during their
(14:46):
presidency that's actuallyoutside of the control.
Bill Clinton and Ronald Reagantook office at opportune times
during one of the biggest bullmarkets in history.
And we'll look at Roosevelt, forexample, Roosevelt's time and
office was.
started with the greatdepression and ended in World
War II.
George W bush had 9-11 happenedduring presidency.
(15:08):
And at the end of hispresidency, we saw the Great
Financial Crisis.
Obama stepped in during theGreat Financial Crisis kind of
timing the bottom.
They're seeing a substantialbull market from there on.
We saw COVID happened recently.
I mean, a lot of this is justthe historical context
economically or just with, orpolitically that's happening
(15:29):
around the presidency.
As they're stepping in office.
Much of this out of their directcontrol.
So as we wrap up today'sepisode, I want to leave you
with this thought.
Stay focused on your long-terminvestment strategy.
And try not to get swayed by thenoise of election year rhetoric
or really the noise of theheadlines any other year.
(15:52):
Historically markets have shownresilience and growth throughout
various political landscapes.
So take a deep breath.
Stay the course.
Focus on what's actually withinyour control, increasing your
income, increasing your savingsrate, the amount that you are
adding, contributing, andinvesting over time.
And trust in the power ofmarkets over the long haul.
(16:14):
And with that really appreciateyour time.
I'm going to have all theresources I mentioned in this
episode, in the show notes,which you can find at the
education hub at my website,www.optometrywealth.com.
And while you're there, pleasecheck out all the other
resources and episodes we'vedone.
As well as feel free to schedulea no commitment introductory
call, and we can talk aboutwhatever's on your mind
(16:37):
financially.
And we can talk about how I helpoptometrist all over the country
solve those same financialconcerns and more.
And with that, we'll catch youon the next episode.
In the meantime, take care.
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