Election Clickbait Is On Its Way. Don't Fall For It

Voting is a constitutional right.  Voting is an avenue for change.  Voting is how we citizens make our voices heard.  Every citizen should make it the utmost importance to vote. 

Election clickbait you can do without.  The same narratives repeat as election season ramps up. 

These are the headlines that I remember, personally.

…….. If Obama gets elected, the market will crash

……… If Trump gets elected, the market will crash

Now, get ready for the next headlines

……… If Trump loses, the market will crash

These headlines prey on our ‘recency bias’.  In the absence of data, they can build anxiety.  It is clickbait. 

Here are 120 years of data.  While there are certain combinations that are slightly better than others, in the big picture, it does not make a difference.  If anything, Democratic Presidents have a better track record.  Unless you are making a large wager on the outcome, the data suggest, that the coming election outcome will not impact your retirement account.

Numbers speak the truth.  Narratives do not.  While un-intuitive, markets do better when a single party does not control both the Presidential Office and Congress.  You ask why?

The reason is simple.  The business cycle is more important to investment outcomes than any election outcome.  The American economy, for all its flaws, is dynamic.  It has regenerative capabilities.  It empowers and rewards the entrepreneur, the risk-taker.  Regardless of which party is in office - builders build - sellers sell - and consumers buy.  Gridlock keeps politicians from doing any harm.

Do not fall for election clickbait.

This is what I believe.

What do you believe?