Elections are Nonpartisan Long-Term

TCI

Nov 9, 2016

Regardless of which side of the ticket you supported, yesterday’s election surprise was a “Brexit” type of event, one which will certainly be remembered from a historic perspective. Markets are likely to be volatile today and in the near future. As prudent investors, the most straightforward way to weather volatility is to remember that you are not in the market just for today, this month, this year, or the next several years. You and your goals have a long-term time horizon. Even if you feel your expected life span is not “long-term,” your wealth is likely to survive you and serve as a legacy to family or charity, so in truth, nearly every investor has a long-term horizon. (And in the rare case where you truly may not have a long-term time horizon for some reason, we have taken that into account and invested for you very conservatively, so you will not see as much volatility in your portfolio on either the downside or upside).

The reality of investing is that markets are highly unpredictable to both the upside and the downside in the short-term, but market performance becomes much more predictable to the upside over longer periods. Historically, we have seen again and again that markets are resilient and rewarding to those investors who possess discipline and patience, and we have seen the converse as well—that investors who fail to adopt that long-term perspective and who take action based on current headlines, crises or emotions, do unwitting and often irreversible detriment to their portfolios and returns. So yes—the only common sense thing to do is to stay the course (and review the attachments here, which explain and demonstrate the powerful long-term rewards of the markets in spite of politics, and that elections and market performance are not highly correlated even though we feel they must be).

People often roll their eyes when we financial advisors say “stay the course,” but in the end, it’s a true, authentic adage. The most successful investors are the “boring” ones—the ones who don’t get rattled by the media headlines; who don’t watch the day-to-day gyrations of the markets; who adopt that long-term perspective we’ve just discussed; who try to educate themselves about the long-term reward that markets provide; who focus on the things they can control rather than those they can’t; and who live their days filled with the pursuit of their life’s goals, happiness and purpose.

As always, our mission is to partner with you on your journey toward financial clarity, prosperity, and overall well-being.

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