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 As the presidential election draws near, many have concerns about the stock market and what, if any, actions should be taken in their portfolios heading into the election. Here are my thoughts:
What Should I Do?
Absolutely nothing. As a strict rule, we do not make investment policy out of presidential politics. Our philosophy is to never attempt to predict or time market movements….ever.
Presidents and congress effect laws that impact various things. The government can impede and even penalize the flow of capital, but it can’t dam up capital all together and most importantly it can never stop human ingenuity. Equity capital is the only asset class which captures this most valuable of all assets…human innovation.
Remember every four years (every two years at the level of Congress), we get to revisit our political decisions. This is the inexorable cycle of democracy as presidents are transient, the national political temper is cyclical, however, capital is forever rational in the long run. If you’re concerned, reach out and let’s talk. By all means get out and vote, but with respect to investment strategy, elections should never shape portfolios- your life goals do.
Our Country is Headed to Hell in a Hand Basket!
Actually, I believe it’s quite the opposite. While problems persist let’s take a look from 20,000 feet:
- Real median household income surged in 2015, while the poverty rate cratered
- Real household income rose 5.2% (largest gain on record since 1967)
- 2.4 million people gained full time work last year
- The largest increases in 2015 incomes were for the bottom fifth of all earners
- Women enjoyed meaningfully larger earnings gains than men
- The gender gap is now the lowest level on record
- The ratio between incomes at the 90th and 10th percentiles narrowed
- The official poverty rate dropped to 13.5% of the population in 2015
- In human terms that’s 3.5 million people moved above the poverty line
- 9 of Forbes 10 most valuable brands are American
- The US is now THE leading energy producer
- The American Dollar is by far the world’s currency
- The American patent system is the most important in the world
- The US banking system is better capitalized than at any time in history
- We have 15 (at least) of the world’s top 20 universities
- 91% of online searches are done through American company servers
- 99% of smartphones run on American made operating systems
From a global perspective, it’s even brighter. The world’s literally incubating millions of people each year into the emerging middle class. As a global population, we’ll continue to move more goods, consume more food and require more living space. Global poverty and war are at record lows, we’re living longer and the world’s never been healthier. |
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Gavin Gleason, President
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