How to Invest During An Election Year
Summary
TLDRIn this informative video, financial coach Terry addresses the economic uncertainties during a US presidential election year, highlighting that historical data shows minimal impact on stock market returns. The S&P 500's performance in election years is comparable to non-election years, with positive returns seen more frequently. The video reassures viewers that there's no need to alter investment strategies due to elections, emphasizing the importance of a diversified portfolio and maintaining a long-term perspective.
Takeaways
- 📉 Economic uncertainty is high in the US, with concerns about interest rates and potential recession.
- 🤷♂️ The impact of a presidential election year on the economy is a common source of confusion and concern for many people.
- 💡 Studies indicate that nearly a third of Americans worry their financial future could be negatively affected by an election outcome.
- 🏛️ Despite concerns, historical data shows that elections have minimal impact on stock market returns.
- 📊 The S&P 500's average return in election years is similar to non-election years, at around 11.3%.
- 🎉 Election years have shown a higher frequency of positive returns compared to non-election years (80% vs 70%).
- 🔍 There is insufficient evidence to link the elected party with stock market performance, as many factors contribute to market fluctuations.
- 🕰️ Presidents often face weaker markets in the early years of their term, with improvements typically seen in the last two years.
- 💰 Forbes analysis suggests that investing remains an effective way to grow wealth, with the S&P 500 outperforming cash by 8.1% on average.
- 📈 The best approach to investing is to maintain a diversified portfolio and not to panic or deviate from strategy due to an election year.
- 🎓 Education is key; free master classes and informative videos are available to help individuals learn about successful investing and money management.
Q & A
What is the current economic situation in the US mentioned in the transcript?
-The transcript mentions that there is a lot of economic uncertainty in the US, with concerns about interest rates and the possibility of entering a recession.
How does the presidential election year add to the economic concerns of people?
-During a presidential election year, people tend to be more confused and concerned about the economy, as they worry about how the election results might affect their financial future.
What percentage of Americans fear their financial future could be negatively affected by an election outcome?
-Studies show that almost a third of Americans believe that their financial future might be negatively affected if the party they least align with is elected.
What does the transcript say about the impact of elections on the stock market?
-The transcript states that studies show an election has a minimal impact on the stock market returns, with the S&P 500's average return during election years being about the same as non-election years.
How does the stock market performance differ between election and non-election years according to the transcript?
-The S&P 500 generates positive returns more frequently in election years (80%) than in non-election years (70%). However, there isn't enough evidence to suggest a correlation between the elected party and the stock market performance.
What factors determine stock market performance according to the transcript?
-The transcript mentions that numerous factors determine stock market performance, including economic indicators, national and international crises, monetary policy, and corporate earnings.
What is typically observed about the stock market performance in the first two years of a president's term?
-The first two years of a president's term typically coincide with weaker markets, while the last two years are more positive.
What does the transcript suggest about the effectiveness of investing during an election year?
-The transcript suggests that investing remains the most effective way to grow your money during an election year, as the principles of good investing still apply.
What does Forbes analysis show about the S&P 500 compared to other asset classes?
-Forbes analysis shows that the S&P 500 generates higher returns than cash, outperforming cash by 8.1% on average compared to other asset classes, with the best return followed by corporate bonds and then gold.
What advice does the transcript give for individuals regarding their investment strategy during an election year?
-The transcript advises that there should be no reason to deviate from or adjust your investing strategy just because it's an election year, and emphasizes the importance of not panicking and maintaining a well-diversified investment portfolio.
What resource does the transcript recommend for learning about successful investing?
-The transcript recommends checking out several videos and a free master class for more insights on how to invest successfully and manage your money.
Outlines
📉 Economic Uncertainty and Election Impact on Finances
This paragraph discusses the current economic uncertainty in the US, heightened by the upcoming presidential election. It highlights the public's concern about potential negative impacts on their financial future based on the election outcome. The speaker, a financial coach, aims to address how an election year may affect personal finances. It also mentions the importance of subscribing to their content for financial advice and offers a free master class for managing money effectively.
Mindmap
Keywords
💡economic uncertainty
💡interest rates
💡recession
💡presidential election year
💡financial future
💡stock market performance
💡party affiliation
💡investment strategy
💡market fluctuations
💡diversified investment portfolio
💡Forbes analysis
Highlights
Economic uncertainty in the US is high due to various factors including potential changes in interest rates and the possibility of a recession.
This is a presidential election year in the US, adding to the economic confusion and concern among the public.
Studies indicate that nearly one-third of Americans are worried their financial future could be negatively impacted by the election outcome.
The speaker, a financial coach from Dow Janes, aims to discuss how an election year can affect personal finances.
The channel publishes videos every Monday to help improve financial literacy.
Subscribers are encouraged to turn on notifications to not miss any future content.
A free master class for managing money is offered, with a link provided in the description.
Historically, election years have minimal impact on stock market returns.
The average return of the S&P 500 in election years is comparable to non-election years, at around 11%.
The S&P 500 has shown positive returns more frequently in election years, at 80% compared to 70% in non-election years.
Insufficient evidence suggests a correlation between the elected party and stock market performance.
Many factors influence stock market performance, not just the president or political party.
The first two years of a president's term often see weaker markets, while the last two years are more positive.
Presidents tend to implement tougher policies early in their term and focus on pro-growth policies as an election nears.
Investing remains an effective way to grow wealth, with the S&P 500 outperforming cash by 8.1% on average.
There is no need to change investment strategies due to an election year; the principles of good investing should still be followed.
Fluctuations in the market are normal and should not cause panic; a well-diversified investment portfolio is recommended.
The channel has several videos on successful investing strategies and a free master class for further financial education.
Transcripts
[Music]
right now there is a lot of economic
uncertainty in the US when will interest
rates come down will we enter a
recession add into the mix that this is
a presidential election year and people
are more confused and concerned about
the economy than ever studies show that
almost a third of Americans believe that
their financial future might be
negatively affected if the party that
they least align with is elected
are those fears founded I'm Terry
Financial coach here at Dow Janes and
today I'm going to talk to you about how
you can expect an election year to
affect your finances but first we do
publish videos every single Monday to
help you improve your finances please be
sure to subscribe and hit that
notification Bell so that you don't miss
any future videos also if you want to
learn our tried and true system for
managing your money be sure to check out
our free master class I'll link to it in
the description
[Music]
below here's how the stock market
performs in an election year I'm going
to start with the good news studies show
that an election has minimal impact on
the stock market returns the S&P 500's
average return during election years is
about the same as non-election years the
average return of the S&P 500 in
election years was
11.3% roughly in line with the 11.6
average return of non-election years in
fact election years saw the S&P 500
generate positive returns more
frequently than non-election years 80%
as compared to
70% there also just isn't enough
evidence to suggest a correlation
between the party elected and the stock
market performance after all there are
numerous factors that determine stock
market performance including economic
indic ators National and international
crises monetary policy and corporate
earnings in fact the first two years of
a president's term typically coincide
with weaker markets while the last two
years are more positive and intuitively
this makes sense presidents tend to
Champion tougher more controversial
policies in the early years of their
term than they focus on more popular
progrowth policies to campaign on coming
up on an election year so regardless
investing is still the most effective
way to grow your money Forbes ran an
analysis that saw the S&P 500 generate
higher returns than cash outperforming
cash by 8.1% on average compared to
other asset classes forb saw the S&P 500
generate the best return followed by
corporate bonds then gold this shows
that remaining invested is the best way
to continue Building Wealth overall it
doesn't look as though there should be
any reason to deviate from or adjust
your investing strategy just because
it's an election year the principles of
good investing will still apply the most
important thing is not to panic remember
that fluctuations are perfectly normal
and develop a well Diversified
Investment
Portfolio if you want to learn more
about how to invest successfully we've
made several videos on that and I'll pop
some of those up on the screen in just a
minute if you want to learn more about
the secrets of successfully growing and
managing your money be sure to check out
our free master class I'll leave a link
for that in the description thanks for
[Music]
watching
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