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Follow on Google News | How Will the Election Impact Your Financial Portfolio?History demonstrates that market conditions are not tied to the presidential election
By: Christopher Krell No matter the political affiliation, all raise concerns that their respective opponents will negatively impact the U.S. economy. Krell characterizes the panic as "a great gnashing of teeth in the investment community over the upcoming election. Opinions vary about outcomes and their impact and there has always been a raging debate about whether Democrats or Republicans are better for the markets." Krell explains through an examination of past data that there is no evidence to support that either party being in control is better for stocks. "Good and bad stock markets occur mostly without regard to presidential policies," he said. "Campaign rhetoric and actual accomplishments of elected candidates are also two entirely different things." In a look at stock market performance under U.S. Presidents since 1945, the market was up the most (18.6%) during the Ford administration. The market rose 14.9% (second highest) under Clinton. The third highest (12.6%) has been under the Obama administration to date and the fourth highest is under President George Bush Sr. (11.9%). Market drops took place during the Nixon administration (down 5.1%) and the GW Bush administration (down 4.6%.) "No matter who is elected President, there are so many moving parts in government that guessing policy outcomes is nearly impossible," In looking at investors since 1897, those who only invest when Republicans are in office or conversely when Democrats are in office, had very low returns. Alternatively, those who stayed in the market regardless of the elected party saw returns more than five times higher. "The only implication of the impending political season's antics that is observable as a market mover is the uncertainty that now exists," said Krell. "Uncertainty is a big headwind for the economy and the markets. Corporate decision makers are reluctant to deploy resources until they know the backdrop that is likely to be in place." To combat that fear of the unknown, Krell emphasizes the need for a globally diversified portfolio. In his view, that is potentially an effective way to reduce risk. About Christopher Krell Christopher Krell, CFP,CFS, is a principal with Cassaday & Company, Inc. He has won many awards and accolades throughout his 18 years with the firm including, most recently "Top Financial Advisors 2015" from the Financial Times, and was ranked sixth by REP Magazine in its 2015 list of the "Top 50 NextGen Independent Advisors in the U.S." for the past two years. Krell has established himself as a trusted financial planner and advisor. For more information, visit www.cassaday.com/ End
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