Presidential elections in the United States are storied events which often culminate with a fresh face in office and a large new voice in American policy.
Though just four and five percent of all Americans voted for Donald Trump and Hillary Clinton during the primaries, many voters now shudder at the prospect of one candidate or the other occupying the White House. Super Tuesday showcased a national display of petulance with a spontaneous surge in Google searches for “how can I move to Canada.”2 Some voters say they begrudgingly favor one nominee over another in hopes of dodging a “greater evil;” others find comfort in a third party candidate (while acknowledging that any third party faces great odds amid a long history of Republican and Democratic victories). There is even a large cadre of Americans claiming they will abstain from voting altogether. Meanwhile, though not part of the vocal majority, a segment of Americans appear to be perfectly comfortable with the drama playing out on the political stage and are pleased with their chosen candidate.
Until November 8, our clients living in the United States will continue to be bombarded with appeals and attacks meant to influence votes, but alarming political commercials and emotionally-charged news articles can spill over and create investment temptations as well. At SYM, we’ll happily stay out of the political debate while offering a few points to consider when it comes to election-year finances.
Viewing the election through an investment lens, our best advice is un-glamorous but sound: stick with the strategy even (and especially) through uncertain times. It’s encouraging that historically, investment values have held solid during times of presidential unpopularity. This also holds true during high-stakes elections where military, business, and social concerns are at the forefront, and when members of either party win. Remember that financial and political analysts have been torturing data for as long as data has been available, and show no sign of easing up. But if the overflow of speculation/information still gets to you, reflect on the following truths:
- With or without gridlock, no party gets its way unfettered.
- Changes in Washington are typically incremental, not revolutionary.
- Interestingly, if you happened to support a primary candidate who was calling for a revolution, know that investments have grown substantially during years in which elections did not result in a desired revolution.
- For better or worse, campaign rhetoric doesn’t always align with what happens during the winner’s presidency.
- Consumers and businesses have a greater impact on the economy than has the government.
- While economic conditions often affect the incumbent party’s reelection odds, the parties themselves rarely cause meaningful differences in investment outcomes.
Bear in mind that SYM’s equity portfolios invest in companies, not in the United States political climate. As with any time, we fully expect stock prices to move up and down throughout the year. However, SYM’s broad diversification among many sectors and countries is designed to lower the impact of any hypothetical regulation on individually debated groups of businesses - such as minimum wage paying restaurants, fossil fuel miners or multinational importers. In the S&P 500 (a company for which one candidate called for a temporary product boycott and promised pressure to end the company’s overseas manufacturing), constitutes under one half of one percent of SYM’s investment portfolio.
SYM’s quarterly presentation will address these issues for our clients in more detail. With that said, for the next few months a relaxation phone app or quality time spent away from all media sources may benefit your investment outlook as much as the strategy principles we usually discuss.
 New York Times, August 1, 2016. Accessed at http://www.nytimes.com/interactive/2016/08/01/us/elections/nine-percent-of-america-selected-trump-and-clinton.html?_r=0
2 US News & World Report, March 2, 2016. Accessed at http://www.usnews.com/news/blogs/data-mine/articles/2016-03-02/google-searches-surge-for-moving-to-canada-after-trumps-super-tuesday-success