Over the last 10 years or so, I’ve noticed a real concern among investors about politics when they look at their investments. In 2010, one of my clients decided to pull out of the market entirely, because he disliked the President so much. In 2017, I saw the same thing, with a very different President.
The question is, does it make a lot of sense? So far the answer appears to be no. Does politics affect the markets? Of course it does. However only indirectly. For example, there has been a great deal of recent discussion about tariffs. Depending on the if/when all these tariffs are implemented it will affect some stocks to a limited extent. But the thing that continues to matter most is earnings. Yes, politics will create wiggles in the market. Nevertheless, a profitable company with solid earnings will continue to chug along for years to come, as the politicians change from one party to another and back again.
So try as best you can to separate the decisions about your investments from who is in the White House or the Governor’s Mansion. Our world runs on the companies that clothe us, feed us, transport us, entertain us, and allow us to communicate. Those things will still be true no matter what the politics are.