Video of former President Donald Trump and President Joe Biden is shown during a hearing of the Special Committee investigating the January 6 attack on the U.S. Capitol on June 13, 2022 in Washington, DC.
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WEST PALM BEACH, Fla. — Investor sentiment is likely to be high in 2024, especially in the political realm, as President Joe Biden and former President Donald Trump prepare for a rematch in this year’s election.
“Politics has become increasingly emotional,” Moira McLachlan, senior investment strategist at AllianceBernstein Wealth Strategies Group, said Wednesday at the Financial Advisor magazine Investing Women conference in West Palm Beach, Florida.
However, strategists say investors should avoid knee-jerk reactions by developing and sticking to an investment plan.
Christina Hooper, chief global market strategist at Invesco, said, “It’s important to stay invested, and you have to work hard to take the emotion out of investing” to avoid doing something “detrimental” to your goals.
Trying to time the stock market and predict its movements is largely a loser’s game. For example, the S&P 500 stock index has returned an average of 8% annually over the past 30 years, according to a recent analysis by Wells Fargo Investment Institute. For example, the study found that missing 30 of the best days reduced average returns to 1.83%.
“There are a lot of geopolitical issues, a lot of things that could scare us,” Hooper said.
In the past four years, the world has witnessed a global pandemic and two wars, said Jenny Johnson, president and CEO of Franklin Templeton.
That tells investors they can’t predict what will happen, she said.
“So, diversify your portfolio,” Johnson added.
No matter which party wins the presidential race, whether Republican or Democratic, history shows the winner has little impact on stock market returns, McLachlan said.
“We tend to think politics drives everything, but that’s not the case,” she said.
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