The elections are finally upon us with voting right around the corner. Political events, like the upcoming Presidential election, often have the ability to rattle financial markets. Investors dislike uncertainty and the political setting is anything but certain. Imagine the concerns: Will taxes go up? What will happen to my investments? Health insurance? Social Security? Medicare?

In early September, leading up to the elections, the US stock market hit an all-time high, amid the political uncertainly and a global pandemic and economic downturn, then bounced around only to close lower at the end of the month.

Such heightened uncertainty can lead to snap decisions and impulsive or emotionally driven financial behavior, which most often can be hazardous to your finances.

It is easy to get preoccupied with the unpredictable. When it comes to your portfolio and investment management keep in mind that a major element to being a wise investor is a long-term perspective. Let’s take a step back and look at the facts about past elections and their effect on market returns. Analysts in Vanguard Investment Strategy Group found that “decades of research demonstrate that election years have no statistically significant impact on market returns or, for that matter, volatility.” Request a copy of the whitepaper - Elections matter, but not so much to your investments.

Comparing election years versus non-election years: 60/40 portfolio returns show no significant statistical difference

In the overall scheme of your financial goals, election cycles have historically been fleeting, frequent and minimally impactful. So, while elections matter, history suggests when it comes to the markets it will be a nonissue.

Now is not the time to make ad hoc changes to a well-thought-out financial plan. However, if you have never created a strategic plan for your financial future don’t delay any more, now would be a great time to start the process. Focus on your personal financial situation and the things you can control; know your goals and priorities, explore your options, apply financial wisdom, invest-don’t speculate and take focused deliberate action.

It’s understandable to have concerns around the election and your trusted advisor is there to help you walk through and address those concerns.

Remember, God will not be surprised by the election results, He has seen rulers come and go. The many Biblical principles on how to handle money can provide guidance, help secure the future, and give you a sense of calm and contentment.  “The plans of the diligent lead to profit as surely as haste leads to poverty.” Proverbs 21:5

*Source: Vanguard calculations, based on data from Global Financial Data as of December 31, 2019. Data represent the 60% GFD US-100 Index and 40% GFD US Bond Index, as calculated by historical data provider Global Financial Data. The GFD US-100 Index includes the top 25 companies from 1825 to 1850, the top 50 companies from 1850 to 1900, and the top 100 companies by capitalization from 1900 to present. In January of each year, the largest companies in the United States are ranked by capitalization, and the largest companies are chosen to be part of the index for that year. The next year, a new list is created and it is chain-linked to the previous year’s index. The index is capitalization-weighted, and both price and return indices are calculated. The GFD US Bond Index uses the U.S. government bond closest to a 10-year maturity without exceeding 10 years from 1786 until 1941, and the Federal Reserve's 10-year constant maturity yield beginning in 1941. Each month, changes in the price of the underlying bond are calculated to determine any capital gain or loss. The index assumes a laddered portfolio that pays interest on a monthly basis.

Note: Past performance is no guarantee of future returns. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.