Being in the financial advisory business, there is no shortage of talk about politics. I can personally attest this presidential election season has ignited more conversation than I can ever recall in my 17 years in this business.  There is one common thread amongst everyone I have talked to… not one person is excited about who our next Commander in Chief will be.  I heard in the news media that our two options for President are the two most historically unpopular candidates ever.  In fact, I recently read that sales of emergency survival food have tripled leading up to this election. With so much fear and pessimism about our country’s future leader, it is only natural that the number one question on the minds of investors is what that will mean for their money.  Now when people are asking that question make no mistake it is a question rooted in fear about what will happen in the immediate days and weeks to come, not next year or three years down the line.  Kind of like my 11 year old son at “Fright Night” some investors want to rush to the exits fearing the worst is right around the corner.  As unsettling as it seems the world is these days, believe it or not, fear is a good thing for financial markets.  As an investor, fear is your friend.  Fear is why it has often been said that the stock market “climbs a wall of worry”.  So when I turn on the television or read the news, I pay attention to the frequency I hear and see fear.  As an Advisor fear gives me comfort.  Fear gives me hope that there is still fuel left in the tank for stocks to rise.  Ok you say, if fear is fuel then what is greed you ask?  Almost 30 years ago, Gordon Gecko uttered the classic line “greed is good, greed works” in the movie Wall Street. While that may work for Hollywood, greed for investors is most definitely not good.  Greed is the enemy.  Greed sucks all of the fuel right of the tank and leaves the market on empty stranded on the side of the road at 2 AM with no help in sight.  As paradoxical as this may sound, the good news is when you look around today greed is almost nowhere to be found.  Fear rules.  So, can the market go down in the days and even weeks following the election?  Of course it can.  Not necessarily for political reasons but rather because of the uncertainty that comes with the election.  And if there is one thing Wall Street doesn’t like it’s uncertainty.  Will it be dramatic?  Yes.  Will it be short lived and manageable?  Almost certainly.  Remember Brexit?  The stock market reacted dramatically for a whopping two days and then resumed its march upward for the rest of the summer as it refocused on fundamentals.  Expect the post-election season to follow suit.   So if you find yourself overcome with fear just remember to take comfort in knowing that you have plenty of company and that means there is still fuel in the proverbial stock market tank no matter who is elected.  And hey if nothing else, at least the election has given us some excellent comedy courtesy of Saturday Night Live.

 

About Kevin Avent view all posts

Kevin Avent serves as the Managing Director - Wealth Management at Unified Trust Company. He is responsible for the coordination and management of the strategic planning, budgeting, ongoing operations, and sales management for the Wealth Management division. As a member of the Trust Investment Committee and Trust Executive Committee he participates in formulating and administering company policies and developing long range goals and objectives. He joined Unified Trust in 2005 and has over 13 years of investment experience creating, implementing and monitoring high level solutions for wealth management clients.