Episode 140: Politics and Your Portfolio- Navigating the Impact of Elections on Financial Health

Can the upcoming election make or break your investment portfolio? Join me, Stacey Hyde, as I dissect how political shifts historically influence markets, and debunk the myth that one party is always better for your financial health. We'll explore why a divided government might actually work in your favor, mitigating extreme policies and promoting balanced decision-making that appeals to the majority.

Beyond the political landscape, I emphasize the critical need to diversify your news sources to avoid the echo chambers of social media algorithms. From the unintended consequences of student loan forgiveness to the real-world complexities of various political proposals, this episode aims to equip you with the knowledge to make more informed and nuanced financial decisions. Tune in for a balanced, insightful conversation on how politics and financial health intersect in today's highly polarized world.

Envision Financial Planning. 5100 Poplar Avenue, Suite 2428, Memphis TN 38137. (901) 422-7526, This communication is strictly intended for individuals residing in the United States. Advisory Services offered through Envision Financial Planning, a Registered Investment Adviser.

Transcript

Speaker 1: 0:00

Hi, I'm Stacey Hyde and I'm back for another episode of Better Financial Health in 15 minutes or less, and today I'm going to tackle a topic that I don't really want to talk about on our podcast, but it's a question that I get at least daily, and oftentimes multiple times a day, and that's about what is this election going to do to my portfolio, or how is it going to impact the economy? And it really doesn't matter whether somebody leans right or leans left, or leans democratic or republican. It's really a question that is on everyone's mind, and I think that it's because we've been through a lot over the last five years. You know, we've had a pandemic, we've had interest rates go up, we've had supply chain issues where we couldn't get things we needed, so I think everybody's a little bit on edge.

Speaker 1: 0:57

History says that elections don't really have that much of an impact on markets. Elections don't really have that much of an impact on markets. When you look at it, you know sort of wisdom would tell you that Republicans are seen as the party of business, so a Republican president should be better for the market. But that's not always the case and actually history shows markets have actually done a little bit better under Democratic presidents than Republican presidents, but that's an average and we don't know or what I would call a purple government. So some red, some blue. So joint control of the House, senate, white House so not having all of those groups being under one party actually probably gives us a little bit better outcome, because in order to make sweeping changes we have to have agreement from people who famously don't agree on a lot. It can also cause gridlock and can take decisions longer to make. But at the end of the day, in order to get somewhere and pass some bills, you have to have some types of agreements. And, you know, in my personal opinion, I think that there's a lot of value in that, because it pulls out sort of the excesses of each side and hopefully what we're left with is something that appeals to the great middle, because I believe that the overwhelming majority of people in this country are really in the middle. You know 80% and then we've got 10% on the far left and 10% on the far right. But our primary system sort of magnifies those voices and when we have divided government it sort of brings it back to the middle.

Speaker 1: 3:05

It's not always the case. Sometimes we just get good luck and it gets dumb. But one thing to keep in mind is about pay attention to how you're getting your news. Try to proactively go, search out alternative opinions, because if you don't, you're never going to get any, because the algorithms for Facebook, for Twitter, for Tik Tok, for any of the social media, is to feed you, and YouTube in particular is to feed you more of what you have shown an interest in. So if you are Trump leaning, it's going to feed you all of these things that vilify the Democratic Party and the Democratic candidates, and the reverse is also true. If you are Democratic leaning, it's going to feed you everything to keep you on that side and make everything on the Republican side look awful, and so you have to really be diligent to go out and get the other side so that you actually can make informed decisions, because we live in a soundbite world now and so and we have short attention spans because our screens have kind of trained us that way, and I think it's important for us, as Americans, to dig a little deeper to understand the nuance of these different proposals that people are making, because so many things they sound great, but then you're like, well, how does this work in the real world and you're like, oh, that's not going to work.

Speaker 1: 4:50

Like, student loans sounds great, we're going to enable people to get an education. Well, it's also led to the skyrocketing cost of tuition because people can get these loans easily. It has led to school loans, the price of college, going up, and people also don't understand just how onerous these loans can be because they're not dischargeable in bankruptcy. That's just one example of something that sounds good, but you need to dig a little deeper to make sure that it's not going to be negative in reality. So there is some value, I think, for people to really dig a little deeper and not just take statements that they see online at face value, and to proactively seek out the other side or just have conversations with people who you disagree with and find out why they believe what they believe, and have conversations in real life, not on a screen or in a comment section, but to really dig deep into that, and I think that we will all be better off for that.

Speaker 1: 6:05

This is a financial podcast, so my advice to you is to stay invested, stay patient, keep an emergency fund and anybody who tells you they know exactly how the markets are going to behave based on one candidate winning or another. They're telling you a lie, they're guessing, hoping they're right, and then, if they're right, they're going to try to sell something. So keep that in mind as you're listening to the pundits, and try to stay focused on your long-term goals. Thanks so much for tuning in. This has been another episode of Better Financial Health, in 15 Minutes or Less.