It’s a startling statistic: 45% of consumers with $100,000 or more in investable assets expect to make changes to their investments because of an upcoming presidential election.¹ Election season understandably raises questions about investment strategy — but emotional investing rarely leads to sound election investment decisions.
Why Election Anxiety Impacts Investment Decisions
Second-guessing your strategy feels natural as an election approaches. Emotions run high as people debate what may happen to the markets in the coming weeks, and election market volatility only adds to the uncertainty.
However, reacting emotionally often leads to poor financial decisions.
Investing always involves risk. That’s why election and investing decisions should be based on your personal goals, time horizon, and risk tolerance — not headlines.
Review Your Strategy, Not Just the News
If an upcoming election affects any of these factors, now may be a good time to review your portfolio. Likewise, if campaign policies concern you, please give us a call — we welcome your perspective, and more importantly, we’re here to help guide you through uncertainty. For insights on how policy changes could impact retirement planning, check out Financial Advice for Retirement Planning for Florida Retirees.
If you’re concerned about one or more of the policies being discussed by candidates, please give us a call. We’d welcome the chance to hear your perspective, and hopefully, we can provide some guidance tailored to your investment strategy.
Make Changes for the Right Reasons
A change to your portfolio should be driven by sound analysis, not an emotional response to a current event. Key principles to keep in mind:
- Base decisions on your personal goals, time horizon, and risk tolerance
- Avoid reacting to short-term headlines or market noise
- Review new economic proposals carefully before adjusting your strategy
- Consult your financial advisor before making significant changes
If an election introduces new economic ideas, we review the proposals and prepare for what may come next — rather than reacting in the moment.
Successful investing comes from discipline, planning, and perspective.
Frequently Asked Questions
How do elections affect investment decisions?
Elections can create uncertainty about future policy, which often leads to short-term election market volatility. However, long-term investment decisions should still be based on individual goals, time horizon, and risk tolerance rather than election outcomes.
Why is emotional investing risky during an election?
Emotional investing during elections often leads to reactive decisions, such as selling during a downturn or making abrupt portfolio changes based on headlines rather than a sound investment strategy.
Should I change my portfolio before an election?
Not necessarily. Portfolio changes should be driven by your financial goals, time horizon, and risk tolerance — not by short-term election anxiety. If you have concerns about specific policies, a review with your advisor can help clarify whether changes are warranted.
How can I stay disciplined with my investment strategy during elections?
Focus on your long-term plan, avoid reacting to daily news, and consult a financial advisor if proposed policies raise questions about your goals or risk tolerance.
- HartfordFunds, 2020
Investing involves risks, and investment decisions should be based on your own goals, time horizon and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
