Trump vs. Harris: What It Means for Your Investments

As the 2024 U.S. presidential election approaches, many investors are left wondering how the outcome will impact the stock market.

Each election cycle, we find ourselves engulfed in the same narrative—often driven by media sensationalism.

Consider the 2008 election. After two terms of George W. Bush, who was perceived as a pro-business president, the narrative around Barack Obama suggested he wasn’t as favorable for the markets and would implement policies that might hurt economic growth.

Ultimately, the stock market did very well during Obama’s presidency.

Fast forward to 2016, and Donald Trump was painted as a chaotic figure; headlines warned that the market would crash if he won.

Similarly, markets largely boomed during the Trump presidency.

In 2020, there was the narrative that Joe Biden wouldn’t be as pro-business as Trump and markets would suffer.

History repeated itself as investors have done very well during the Biden administration.

With all this noise, what should you do with your investment portfolio in anticipation of the election?

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The answer is simple: nothing. Panic and fear often drive investors to make hasty decisions, which can be detrimental to long-term financial goals.

Looking at history, the data bears this out. Stock markets tend to increase over long-time periods, no matter who is the president.

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It's essential to understand the media's role in perpetuating these narratives. Media outlets are not in the business of educating investors or promoting rational decision-making; they thrive on clicks and visitor engagement. Fear, hysteria, and bold proclamations generate headlines that attract readers. A headline stating, “The election doesn’t matter to your portfolio,” might be true, but it won’t draw nearly as much attention.

The president's impact on the stock market is frequently overstated. The reality is that most economic policies require congressional approval. They cannot act unilaterally.

Both Trump and Harris have proposed policies that, for various reasons, could be deemed anti-business. Yet, the question remains: how much of this election talk will translate into actual policy that can pass through Congress?

Further, politics is just one of several variables that can affect investments.

For example, the 2008 Financial Crisis greatly impacted both the Bush & Obama presidencies.

Meanwhile, the pandemic impacted the markets beyond either Trump's or Biden's control.

As we approach the 2024 presidential election, it's essential for investors to stay grounded and avoid being swayed by media-driven narratives. The stock market has proven resilient regardless of who occupies the White House. Instead of reacting to election hype, focus on your long-term investment strategy and avoid making impulsive decisions based on fear or uncertainty. The evidence suggests that staying the course is the best approach for achieving financial success, regardless of the political landscape.

*The views and opinions expressed in this article may not necessarily reflect those of IPC Securities Corporation.