Smart investing doesn’t happen in a vacuum.

Current events matter, and this year, the 2024 Presidential Elections are taking center stage.

That’s rattling a lot of people, causing election stress for many.

It’s also raising a lot of questions about investing in election years, how to respond to market uncertainty, and what money moves truly make sense.
 

5 Things That Can Trip Investors Up in Election Years (& How to Handle Them)

Here’s a handful of key factors to keep in mind when you’re investing in an election year.

1. Political “noise” & bias

Scary news gets views, clicks, and eyeballs, and election years can give rise to all sorts of unsettling headlines and stories.¹  That’s one reason why more headlines are focused on fear, anger, and disgust-driven topics these days.¹

It’s also why more of us find ourselves doom scrolling and second-guessing the media.^1,2 And no matter where we go for news in an election year, we can be inundated with alarming information and “what ifs,” which can make us spin out every worst-case scenario.³  With that, we’re more likely to overestimate the risks and impacts of the other party’s policies.^4,5

Pro Tip: Stick to a few trusted media sources for your news. Don’t spend hours reading, watching, or listening to the news. If you need to check headlines every day, set aside just a few minutes. Also, turn off your push notifications for news apps, so you can take in the shocking headlines on your terms and timetable.

2. A short-term outlook

With a presidential election on the horizon, a lot of attention is paid to who’s running, what they’re promising, and what they’ll do if they win. That can shift our mindset to the short-term, making us far more sensitive to the smaller market hiccups that may occur in election years.⁶

It can also mean we put far too much weight into the results of any given election.

Pro Tip: Remember, the markets don’t actually care about elections and presidents, per se. Policies matter more.⁷ Plus, regardless of which party takes control of the White House, most election years have brought stock market gains, with more stability after the election is over.⁷ So, try not to zero in on the 2024 (or any) Presidential Election results as making it or breaking it for your financial life and future.

3. Ignoring the trends (or not taking a moment to learn them)

Election year stock trends can show that the markets may be less volatile than you expect around election time.⁷ In fact, positive returns have marked most election years over the past century, even during some of the most politically contentious elections in U.S. history. That includes the last three elections in:^7,8

• 2020 when Joe Biden won, and market returns were 18.4%.
• 2016 when Donald Trump won, and S&P returns were 11.96%.
• 2012 when sitting President Barack Obama was reelected, and market returns were 16%.

That macro trend and others can ease our election stress and help us put the drama of politics in its place. And its place should not be the driver’s seat when it comes to our financial decisions.

Pro Tip: Get up to speed with or brush up on general market trends in election years. As you do, it’s crucial to keep this next part in mind. . .

4. Trying to time the markets

Timing the markets can be a fool’s game. That’s why most pros say time in the markets is far better than timing the markets.

And if your long-term goals and overall circumstances haven’t really changed, wild changes in your investment strategies may not make a whole lot of sense, presidential election year or not.

Pro Tip: Don’t base your financial moves on politics, trending stories, or heat-of-the-moment panics. And remember, if you’re pulling out of the markets because of an election or who won it, you could be cutting off your nose to spite your face. That’s because you could miss out on the returns and stronger market performance that tend to occur in years three and four of an election cycle.⁷

5. Not checking in with your financial planner

With major events like elections, uncertainty is natural. None of us know exactly how it’s all going to play out, and that can be nerve-racking from a financial perspective. Trying to balance all of that on your own can be a mistake.

Pro Tip: If you’re considering a major money move before or because of an election, give us a call first. If you’re a member of the Eagle Wealth community, then you have a financial plan aligned with your goals, ready to deal with market fluctuations.  We can talk through your concerns and help answer any questions.

And if you’re not already a client and want to talk about the markets and upcoming elections, give us a call. We’d be happy to help.

Until next week,

Your Eagle Wealth Team

A Beginner’s Guide To Juicing 

Juicing is a fantastic way to get some extra fruits and veggies into your diet, especially on those busy days when you can’t find time to make a nutritious meal. Plus, it’s easy to start and reap the many benefits.

First, decide what kind of juicer you want. The two most common types are masticating and centrifugal juicers. Masticating juicers “chew” the food and are slower. Preparing the produce for these juicers takes longer because they can juice only small pieces, but you retain more nutrients. Centrifugal juicers are slightly more affordable, and juice with a spinning disk. You do less produce prep, but the juice doesn’t have as many nutrients.

Next, you need to decide what to juice. You’ll learn which fruits and veggies yield the most juice and which choices combine well with others, but here are two simple recipes to get you started:

Green Juice
Celery
Cucumber
Apple/pineapple/orange/lemon
Spinach/kale

Purple Juice
Beets (you can juice the green tops as well)
Kale
Carrots

You can add ginger, turmeric, or even garlic to give your juice extra flavor and kick.

The Week on Wall Street

Stocks pushed higher last week, led by big tech names and boosted by December inflation reports that were mixed but positive enough to shore up investor confidence in Fed rate cuts this year.

Stocks Rock And Roll

It was a rocky week that ended on a high note. Stocks rallied Monday after the prior week's decline. Tech shares led, with the Nasdaq posting its best day since November 14.

On Tuesday, stocks initially tumbled but recovered most of their losses late in the session. Stocks rallied on Wednesday ahead of inflation news the following two trading days. Stocks fell initially on Thursday in response to a hotter-than-expected inflation report, reflecting investor concerns about the certainty, timing, and extent of Fed rate cuts later this year.

On Friday, the start of earnings season brought mixed results from a handful of major banks. By close, stocks had recovered most of their losses, ending the week with solid gains.^{9,10,11,12,13}

A Tale Of Two Inflation Reports

The biggest economic news last week was fresh inflation data. The Consumer Price Index (CPI) rose 0.3 percent in December over the prior month and 3.4 percent compared with a year prior. That number was higher than the 3.2 percent increase economists expected and a few ticks elevated from the 3.1 percent figure in November.^14,15

Core CPI for December, which excludes volatile food and energy components, rose 3.9%, a slight decrease from November's 4.0% gain.

On Friday, the Producer Price Index (PPI), which measures inflation by domestic producers, showed a drop of 0.1% for December, possibly suggesting that the CPI’s uptick may have been an anomaly.^14,15,16

Source: YCharts.com, January 13, 2024. Weekly performance is measured from Monday, January 8, to Friday, January 12.  ROC 5 = the rate of change in the index for the previous 5 trading days. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period.  Treasury note yield is expressed in basis points. Any companies mentioned are for informational purposes only, and this should not be considered a solicitation for the purchase or sale of their securities. Any investment should be consistent with your objectives, time frame, and risk tolerance