The Election & Your Portfolio: What You Need to Know
October 17, 2024
Speakers: Erica Arroyo, Marty Miller, Mark Peterson and Becky Schubert
For those of you who joined our webinar last Thursday, thank you. If you did not have the opportunity to join, below is a recap of the conversation that our team had with two of our strategic partners at BlackRock, Mark Peterson and Becky Schubert.
In our conversation, we covered three key topics:
- Current market performance
- Historical market behavior during election years
- Our investment approach to customization and strategy during election seasons
Current Market Environment and Volatility
- 2024 has seen only 4 days of +/- 2% market moves, indicating low volatility
- Market volatility typically increases with economic concerns rather than political events
- The combination of Fed rate cuts and no recession typically leads to positive market returns
- Historical data shows better market returns during periods of low volatility (fewer than 10 days of 2% moves)
Strong Market Performance in Election Years
- 2024 is up over 20% through mid-October, ranking as the 3rd best election year start since 1928
- Election years historically lose money only 16% of the time (4 out of 25 years)
- Major losses in election years typically required significant events like the Great Depression or Global Financial Crisis
- Markets tend to perform slightly better in election years compared to non-election years
Politics and the Market: Key Points From the Webinar
- Long-term investors who stayed fully invested over the past 10 years saw $100,000 grow to $372,000
- Investors who only invested during their preferred party's presidency saw significantly reduced returns ($205,000 or $181,000)
- Market performance is driven more by economic factors than by which party controls the White House
- Similar sector performance occurred during both Obama and Trump administrations despite different policies
- Politics should not drive investment decisions
Custom Investment Management Approach
- MA Private Wealth has partnered with BlackRock for the past 6 years to leverage their institutional intellect to design custom portfolios for our clients.
- Four-step process: strategic asset allocation, tactical adjustments, investment vehicle selection, and risk management.
- Uses BlackRock’s proprietary Aladdin risk management platform to analyze over 3,000 risk factors daily.
- Maintains dynamic approach while keeping long-term strategic framework.
Investment Strategy Overview
- Focus on long-term investment goals rather than short-term political events
- Maintain strategic asset allocation with tactical adjustments as needed
- Keep politics separate from money management and portfolio decisions
- Stay invested to benefit from compound returns over time
We understand that election season can feel uncertain, and at times, unsettling. We hope that you are able to takeaway that over the long-term timeframe, markets are resilient, and in the short-term, our team is here with a strategy in place, and we will be dynamic in our response to changing markets.
If you would like to connect with our Team to discuss any of the topics we covered, we invite you to reach out to us to schedule some time to meet. You can reach our team at 650-232-2021 or info@maprivatewealth.com.
