We aren’t even a month into the year, but it seems like every “expert” from the guy on the news to your Uncle Joe is talking about what the election this year means for the stock market.
Politics matters in our lives and we should make ourselves informed and vote. But we should not give it a second of thought when it comes to investing.
We have no idea what will happen with this election or with the stock market this year. No one does, despite them confidently telling you what will happen.
What we do know is if you look back in history, long term investors are rewarded for continuously investing no matter who is in the Oval Office. It doesn’t matter if you hate the president or love the president. Investing consistently is what gets you rich.
Will the stock market be better because it’s an election year? History tells us the market has been ever so slightly better during election years, but only by a hair. There have been some election years where the market did lousy (2008, 2000) and others that were great (1996, 2020).
The best course of action is to ignore the noise of people talking about politics and stick to your plan. Keep investing as much as you can each month into the stock market. That’s how real wealth is built.
The graph shows the growth of $10K invested in the S&P 500 in 1950. We removed the Y-axis since it’s not relevant for the post, but the $10K would have grown to be worth $28M today!
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Vivi & Shane
