• Skip to primary navigation
  • Skip to content
  • Skip to primary sidebar

Wealth Pilgrim

No Money Worries. No Matter What.

Neal Frankle featured in
  • Home
  • Life Insurance
  • Investing
    • Build Strong Investment Building Blocks To Avoid Going Broke In Retirement
    • Systematic Mutual Fund and ETF Investing
    • Stock Market Investing Guide
    • Choosing the Right Investment Brokerage Guide
    • How Bonds Work Guide
    • How Banks Really Work Guide
    • Annuities – What You Need To Know Before You Invest
    • A Beginners Guide To Buying Individual Stocks
    • Create A Pool Of Great Mutual Funds and ETFs To Pick From To Secure Your Retirement
    • ETF and Index Fund Investment Guide
  • Earn More
  • Credit Cards
    • Travel
    • Airline
    • Hotel
    • Cash Back
    • 0% APR
    • Rewards
    • Balance Transfer
    • Small Business
    • No Annual Fee
    • Student
    • Secured
  • Retirement Planning
    • Retirement Guide
  • Ask Neal a Question
  • Reviews
    • Upgrade Personal Loans Review
    • Lending Club Review
    • Prosper Review
    • Ally Invest TradeKing Review
    • CIT Bank Review
    • LegalZoom Review
    • Lexington Law Review
    • Airbnb Host Review
    • Should You Drive For Uber?
  • Tax
  • Courses
    • Raise Your Credit Score So You Can Buy a House – Free Video Course

How To Invest After the Election

by Neal Frankle, CFP ®, The article represents the author's opinion. This post may contain affiliate links. Please read our disclosures for more info.

Share
Share
Tweet
Pin

Should you make any changes to your investment strategy after the election?   In the days immediately following President Obama’s victory, the market tanked. Is that a sign of things to come? What about other investments like bonds and real estate? Are they poised to flounder or flourish? Let’s take a look.

Neal’s Notes:  While we’re on the topic, have you ever considered how to invest during a huge market correction or bull market?  You might be surprised by my answer.

Stock Market

Great news for President Obama; he doesn’t need to find a new place to crash. But the same can’t be said about the stock market lately. Take a look at the graph below.

after the election

This is a chart showing prices of SPY – an ETF that tracks the S&P 500. If you whip out your calculator, you’ll see that the index fell about 3.5% in the 7 days following the election. Ouchy. But before you push the “SELL” button, consider this:

The market fell about 10% in the week following President Obama’s first election. But even though the market did poorly that first week, the index was 48% higher 4 years later.

There is of course no guarantee that the next four years will duplicate that sweet performance. The point is that it makes no sense to project what is going to happen over the next four years based on what’s happened so far since the election.

At the end of the day, the market craves certainty and we don’t have a lot of certainty right now. That’s partially a result of the potential “fiscal cliff” our economy may face come January 1st 2013. (I could be wrong but I feel that the fiscal cliff will be averted and that could introduce a bit more certainty into the market. Of course, the fiscal cliff isn’t the only risk the market faces. There are potential wars, oil embargoes, European recessions and a debt crisis to consider as well.)

Here’s what is important to consider. If you invest in the stock market, you shouldn’t be doing so based on what you think is going to happen over the next 4 years. You need a much longer time-frame in order to achieve better results with your investments.
Bottom line? Stay on task with your long-term investing. Don’t get side-tracked based on short-term events.

Bonds

Bonds are probably not a good bet right now. That’s because rates are so dang low. Interest rates have almost nowhere to go other than up. When rates climb, bond prices fall. That’s how bonds work.

I have no idea what President Obama is going to do, but a great deal of debt was created during his first term. It’s very possible that this trend will continue. The greater our national debt, the more risk there is that inflation will increase. When inflation climbs interest rates usually follow. All this is bad news for bonds.

Real Estate

Ready for some cheery news? All signed point to now being a good time to own rental property. If the real estate market continues to improve, the value of your assets will increase. And if it rolls over and plays dead, more people will compete to rent your property. That’s going to drive your rental income up. Win-win for you. Sweeeeeet.

Bottom Line

There are a number of competing forces that will impact the value of your investments over the next four years. The reality is you can’t possibly predict what the outcome will be.

Right now the stock market remains uncertain. But this is no different from any other time. The market is never certain. Make sure you are using the right investment strategy that fits your financial and emotional needs and stick to it.

Bonds are a risky bet right now. But that’s been the case for some time. This would be the case regardless of who won the election.
Real estate remains an interesting proposition. Just be careful to invest in the right market. Certain areas are much more attractive than others.

If you read between the lines, you understand that I’m encouraging you to ignore the results of the election when you make your investment decisions.

Are you changing your investment strategy based of the election results? How? Why?

Share
Share
Tweet
Pin

Looking for even more helpful financial investment info?

Subscribe to the Wealth Pilgrim VIP Newsletter!

You will receive bi-weekly updates including helpful articles and exclusive invitations to live Webinars!

Reader Interactions

User Generated Content (UGC) Disclosure: Please note that the opinions of the commenters are not necessarily the opinions of this site.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Are You Human? * Time limit is exhausted. Please reload CAPTCHA.

Primary Sidebar

Who is Neal Frankle

Neal Frankle

I'm a Certified Financial Planner™ with more than 25 years of experience. I feel very blessed and hope to share my personal financial experience and professional wisdom with readers of WealthPilgrim.
Read More »

Stay Connected

FacebookTwitterYouTubeRSS

More Categories

Banking
Career Development
College Funding
Credit Cards
Credit Score Fixes
Money and Marriage
Debt Relief
Estate Protection
Property Investment Loans
Small Business Strategies
Spend Less Money

Disclaimer

Wealth Pilgrim is not responsible for and does not endorse any advertising, products or resource available from advertisements on this website. Wealth Pilgrim receives compensation from Google for advertising space on this website, but does not control the advertising selection or content. Please do the appropriate research before participating in any third party offers. The information contained in WealthPilgrim.com is for general information or entertainment purposes only and does not constitute professional financial advice. Please contact an independent financial professional for advice regarding your specific situation. Wealth Pilgrim does not provide investment advisory services and is not a registered investment adviser. Neal may provide advisory services through Wealth Resources Group, a registered investment adviser. Wealth Pilgrim and Wealth Resources Group are affiliated companies. In accordance with FTC guidelines, we state that we have a financial relationship with some of the companies mentioned in this website. This may include receiving payments,access to free products and services for product and service reviews and giveaways. Any references to third party products, rates, or websites are subject to change without notice. We do our best to maintain current information, but due to the rapidly changing environment, some information may have changed since it was published. Please do the appropriate research before participating in any third party offers.


About · Contact · Disclaimer & Privacy policy

Copyright © Wealth Pilgrim 2019 All Rights Reserved