Hi Reader,

We are now in the month of October, which means we are just days away from the next presidential election. As you might expect, it’s a period where we get a lot of questions from friends, relatives, and acquaintances.

"What do you think the market is going to do?"

“Should I do something different until we get past the election?”

And any number of similar questions.

Before we dive in, did you catch the most recent podcast episode?

​"The Essentials of Social Security: An Insider’s Insights to Help You Plan with Confidence."​​ Listen Now ➡️

I recently had a conversation with a fellow financial planner who shared a powerful story reinforcing an important lesson: keeping politics out of your long-term investment strategy. One of his clients, a close friend, became so unnerved by the political climate leading up to the 2020 election that he decided to sell off his entire investment portfolio. Despite all the advice to stay the course, he believed he could safely re-enter the market "once the dust settled."

The day after the election, the S&P 500 stood at 3,443 points. Today, as of this writing, it's well over 5,700. But that’s not the real issue—the true heartache lies in the fact that his friend is still sitting on the sidelines in cash. And he’s full of regret.

This isn't an isolated story. In times of political or economic turmoil, many investors, especially those planning for retirement, let fear dictate their decisions. They exit the market, hoping to avoid potential losses. It’s a natural reaction—we’re wired to avoid pain. Unfortunately, in doing so, they miss out on the inevitable recovery that history has shown time and again.

The image above indicates the growth of a $10,000 investment in the S&P 500, invested only while a Republican was in office (in red) or invested only while a Democrat was in office (light blue) during the period from 1961 to 2023.

And finally... what happened if the same $10,000 stayed invested during that entire time period (dark blue), regardless of the political party in office.

Markets may be volatile, but companies continue to innovate, earnings recover, and dividends rise. In time, the market regains strength, often moving beyond previous highs. Those who stay invested through the turbulence benefit, while those who go to cash often find themselves unsure of when to jump back in, constantly fearing another downturn.

It’s understandable to feel fear during periods of uncertainty—after all, you’re human. But before making any rash decisions, remember that short-term relief often leads to long-term regret. No one can predict the future, and every situation is unique, but sticking with a well-thought-out, long-term plan is often the best course of action.

We understand the unique challenges you face while planning for retirement. Our goal is to guide you through these turbulent times so you can feel confident in your financial future and focus on living your best life.

If you have questions or concerns about whether you have the right long-term investment strategy in place, don’t hesitate to reach out.

Keeping Retirement Simple,

Eric Blake, CFP®

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