The Election: How to Position Your Portfolio

John Noonan Uncategorized

Depending on the winner of the presidential election, there’s something you’ll absolutely want to do with your portfolio. If Clinton wins, you should…

…do nothing.

But on the other hand, if Trump wins, you should…

…also, do nothing.

Were you expecting a big secret? An actionable insight?

No one knows what’s going to happen in any market, for any reason, at any time. Period. If someone tells you otherwise, they either don’t understand history, or they’re trying to sell you something. In either case, there’s no upside for you.

Mountains of data, research, and science confirm our claim. If the market was predictable, or if patterns could be recognized and exploited, we would see the evidence in the form of consistent, outsized returns, for those capable of generating them. The data, however, shows no consistency or persistency of returns, only occasional bursts of luck that always fizzle out. Yet, that won’t stop the predictors from trying to reach into your wallet. Warren Buffet said it best: “A prediction about the direction of the stock market tells you nothing about where stocks are headed, but a whole lot about the person doing the predicting.

Regardless of the election outcome, you should do what the evidence says you should do: keep costs low, diversify, don’t time the market, and stay disciplined. It’s a simple formula, and it works. Of course, simple doesn’t mean easy. Your emotions will do their best to hijack your portfolio. And they’ll be on high alert on November 9th, when the media bombards us with even more baseless predictions.

Under our new president, the markets will continue to go up and go down, over and over again, in no particular, predictable order. It’s nothing new. And we can’t stop it. What we can do is focus on the long-term, and tune out the short-term noise. This election, like the collapse of the Greek economy, like Y2K, like Brexit, like every other news story before it, is just noise.