A question that has come up often over the past few weeks in my practice is similar to the one I received yesterday from a client. This client wrote to me saying: “I’m genuinely terrified of a potential Harris' presidency. She has never run anything in her life and the main responsibility she has had as vice president was on border security, which she failed at miserably. I am also not enamored about another Trump presidency since he does not seem stable. Is there anything that gives you a sense of hope during these scary times?”
So, What gives me hope is that out of the 350 million people in this country, we've narrowed down who we want to lead us to these two esteemed individuals. Just joking. But in truth, if the market was able to handle an Obama presidency, where he also had no experience, and a previous Trump presidency where there was a lot of upheaval with his cabinet, and a Biden presidency where he experienced rapid mental decline and wasn’t actually running the country for most of his term, then we’ll get through a Harris presidency, regardless of her perceived incompetence, as well as another Trump term.
And, as I say often, the market doesn't care who is in The White House. The market will continue to persevere, regardless of who is in office. Sure, certain industries may be more difficult to work in depending who is in the Oval office. For example, a president who favors more regulation and vilifies a certain industry will make it a tough four years. I found this during Obama’s term, where he vilified the “Fat Cats” and billionaires on Wall Street, playing by a different set of rules, while the government piled on more onerous regulations. The reality is most people working in finances are neither fat cats or billionaires, but had to deal with 8 years of this rhetoric. Yet, we got through it.
In reality, the best case scenario for investors is political stalemate, where the party in office is different from the party that controls congress. A stalemate provides certainty of no drastic political agendas getting passed, which investors benefit from (and many citizens may appreciate since politicians are restricted in what they can do to screw up the country). As an investor, if there is something I would root for it would be a political stalemate.
Regardless, no drastic changes should be made to your portfolio based on who is in the office. In fact, you probably shouldn’t change anything at all if your portfolio was designed correctly from the onset, based on your goals and time horizon. You just need to stick with your strategy and ignore the noise.
At the end of the day, ordinary Americans are what drive the economic growth of this country. It's not the politicians. As long as you believe in continued innovation and progress, the market will prevail and society will prevail, irrespective of what is happening in Washington. And that truth gives me something to be hopeful about.