Stock Markets Jostle with White House Uncertainty

June 20, 2017

 

" . . . the market still responds to the change during elections."

 

 

The markets are going to jostle and shake as this administration's starts to become unhinged. "Where all this leads is moot as the firing, ongoing investigation, and talk of impeachment are unnerving markets. The initial reaction was a 300-point drop in the Dow Jones Industrial (DJI)" (Chapman).

 

As everyone knows the S&P and the Dow enjoyed a long run under President Obama and the current economic stability we enjoy -- until it is dismantled -- is still coming from the Obama Administration's final economic contributions.

 

During years where the Executive branch isn't embroiled in intrigue and investigations the market still responds to the change during elections. As Lee Bohl mentions in his article for Charles Schwab "there seem to be some meaningful differences in both rates of return and winning percentages in each of the election cycle years. The first two years of the cycle tend to be weaker than the last two, with the post-election year being the weakest year and the pre-election year the strongest." 

 

With all of the research surrounding politics and the influence on the stock market coupled with the uncertainty we currently face, you must ask yourself a very important question. Can your 401(k) withstand a crumbling executive branch? 

 

If your answer isn't a definite yes...then you might want to see your 401(k) advisor, I've already met with mine.

 

References:

Bohl, Lee. Presidents, Politics, and the U.S. Stock Market. Charles Schwab. n.d. 

 

Chapman, David. How Political Uncertainty Affects the Stock Markets. Born 2 Invest. n.d

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