Politics and the Market

Rest assured, investors have prospered in markets even during difficult political times. The average return of the S&P 500 Index is approximately 11% since the end of World War II, even though we’ve had impeachments, additional wars and ambitious new spending. While we can’t say with any certainty who will win in November 2020, we can say for sure that staying the course has always made the most sense for investors. Even in the middle of a recessionary environment related to the impact of COVID-19, investors should focus on staying buckled in and look past the headlines to the underlying story that really matters. What Lincoln said in the nineteenth century remains wise advice for 2020: stand firm.

Our 10 Truths No Matter Who Wins

  1. Markets have performed well under both parties.
  2. Investors are better off staying fully invested.
  3. We do not radically re-engineer the US economy.
  4. The historical narrative is not as you remember it.
  5. Signature legislative accomplishments are infrequent, and the impact is not always as expected.
  6. Predictions tend to be wrong.
  7. Monetary policy matters more.
  8. It’s okay if you don’t like the President. The market doesn’t care.
  9. No, this is not the most vitriolic election.
  10. Don’t confuse partisan politics with market analysis and keep your eye on one indicator.


The above is an excerpt of “10 Truths No Matter Who Wins” by Invesco.

These views represent the opinions of the authors and are not intended as investment advice or as a prediction of the performance of any investment. These views are as of the open of business on December 31, 2019, and are subject to change on the basis of subsequent developments. Forward-looking statements are not guarantees of future results. They involve risks, uncertainties and assumptions, there can be no assurance that actual results will not differ materially from expectations.

Equities are subject to market risk and volatility; they may gain or lose value. Fixed income investing entails credit and interest rate risks. Bonds are exposed to credit and interest rate risk. When interest rates rise, bond prices generally fall, and a fund’s share prices can fall. Foreign investments may be volatile and involve additional expenses and special risks, including currency fluctuations, foreign taxes and geopolitical risks. Emerging and developing markets may be especially volatile. The mention of specific countries, currencies, companies, or sectors does not constitute a recommendation by any particular fund or by Invesco.

This material is provided for general and educational purposes only, is not intended to provide legal or tax advice, and is not for use to avoid penalties that may be imposed under US federal tax laws. Invesco is not undertaking to provide impartial investment advice or to provide advice in a fiduciary capacity. Contact your attorney or other advisor regarding your specific legal, investment or tax situation.

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