The presidential election season is upon us and many of us are wondering how this may affect our investments. Below are truths that will help you keep a healthy investing mindset:
- Investment performance over the short term, including during election season, is largely driven by emotions and randomness
- The economy is much larger and influences markets much more than a certain political party in power
- Political parties and the media will bombard you with partial truths and tag lines to get you emotionally charged (so you will tune in)
- Investing based on news headlines, emotions or "expert" forecasts can be a very costly activity
- Recognize the difference between luck and investor skill
- Guessing the right outcome is luck
- Patience and discipline are fruits of investor skill
- Process transcends returns in uncertain scenarios (like an election)
- Let the investment process guide your decisions
Vote with your heart and energy, not with your portfolio.
©2020 The Behavioral Finance Network. Used with permission.