Don’t Mix Your Planning with Your Politics
Tomorrow is the Mid-term election and I was curious how the stock market might react. After some research, I found the following chart:
Since 1934, the stock market has delivered positive results in the 12 months following mid-term elections.
Is this Market Normal?
You may also be wondering if this market we are experiencing is normal? Have we seen this before? Following is a slide depicting the market from 1970-2022:
What this slide shows is after the worst 12 month stretch in each decade, the next 12 months had the biggest rebound!
What is the global market outlook through 2023?*
o U.S. Economy- Recession risk sitting at 55% through mid-2023.
o Inflation- Will remain volatile around gas prices geopolitically. Core inflation may have peaked in the U.S. We may likely see rates pause in 2023 as housing prices fall.
o Fixed Income- US government bonds offer good value, especially if Fed pauses on rate hikes in 2023.
o Real Assets- Reits, (real estate investment trusts), could be attractive if Ukraine conflict subsides and inflation concerns continue.
o Currencies- If global economic activity cools, US dollar could strengthen as investors seek quality assets.
There is no guarantee that these expectations will be met. Therefore, it is even more important that your portfolio is built upon diversification. Be sure your investments have exposure to all parts of the U.S. and International economies.
“When people are fearful, it’s time to be greedy.”
Warren Buffet
Don’t panic, stay invested, and take advantage of the cheaper prices of stocks. This chart shows that since 1985, positive results have been achieved, regardless of entry point, after 5 years.
It’s not about TIMING the Market, It’s TIME in the Market.
*Source: Russell Investments
