Market Analysts Say Don’t Worry, Election’s Impact on Returns Will Likely Be Minimal

Despite recent market gains, many Americans are worried about how the upcoming election will affect their savings and investments. However, financial analysts say that, regardless of who wins, the person in the Oval Office will likely have less of an impact on market performance than people think.
“Investors should stay the course and avoid market timing,” Tim Schwarzenberger, portfolio manager with Inspire Investing, told The Epoch Times. “The party in charge doesn’t make too much of a difference.”
Americans can be forgiven for feeling this way, considering that recent inflation has wiped away more than 20 percent of the dollar’s value over the past four years. Many economists point to trillions of dollars in new federal spending and new regulations under the Biden–Harris administration as contributing factors in driving up prices.
This analysis assessed market data over the past 75 years and found that the medium-to-long-term effect of one party or the other occupying the White House or Congress was “minimal.”
The ASPPA comes to a similar conclusion.
“Election seasons can be draining on all of us as we’re hit with relentless campaign ads and messaging, leading us to believe we need to prepare our investment portfolios for the worst,” Kevin Justice, senior vice president of the Nationwide Investment Management Group, stated in the ASPPA report. “However, it’s important to remember that election results in either party’s favor have historically had little impact on future investment returns.”
“Earnings growth continues, not just in tech, but across the board,” Woods said. “We have 10 of 11 sectors up over 10 percent year-to-date; it’s a broad rally.”
This reversed decades in which the Fed held rates so low that investors had to seek riskier and more volatile returns from stocks, real estate, commodities, and crypto currencies to keep up with inflation. And although the Fed has begun cutting interest rates again, market analysts say that low-risk opportunities, though fewer, can still be found.
“Savers are still in a position to lock in yields on CDs that should handily outpace inflation for a multi-year period,” Greg McBride, chief financial analyst for Bankrate, told The Epoch Times. “But you have to seek out the most competitive offerings as this is the difference between staying ahead of inflation or falling behind.”
“There is no need to chase yield,” McBride said. “The yield is still very much alive in cash and fixed income investments.”
Investors who are seeking to hedge against rising inflation often look toward commodities, especially gold. However, these investments have also become expensive.
“If Trump is elected, it could put a damper on some of the stocks in the semiconductor index,” Woods said. “Financials will do much better under Trump because lending and deals will be a focal point of his administration, whereas under Harris there’s more regulatory scrutiny.”
“If you want to gift assets or make charitable contributions, or make contributions to your retirement accounts … if there’s some portfolio activity that you could do to offset any tax liability, let’s make sure that we take advantage of all of the tax minimization strategies available to us,” he said.