Broker Check

Navigating the 2024 Presidential Election: Why You Should Not Move to Cash

March 12, 2024

As we stand on the brink of the 2024 presidential election, the political landscape is full of anticipation and speculation. For many, these times can be marked by heightened emotions, passionate debates, and a constant influx of information that shapes our perspectives. The fate of the world seems to hang in the balance. But when it comes to investing, do elections matter that much? History tells us no.

Our job as financial planners is to give perspective during times of uncertainty and help guide you through the noise. In this article, we'll share information that may help maintain a long-term focus so investors can position themselves for a brighter future regardless of the outcome at the voting booth.

History shows investors have poured into money market funds – traditionally one of the lowest-risk investment vehicles – with more significant frequency ahead of elections. This suggests that investors want to minimize risk during election years and wait for uncertainty to subside before reinvesting. However, market timing is rarely a winning long-term investment strategy and can pose a significant problem for portfolio returns.

Below, we look at three hypothetical investors with different investment approaches. The ending value of each portfolio over the last 22 election cycles was calculated, assuming a four-year holding period.