Every four years, the US presidential election, exactly on schedule, is a source of uncertainty that some market observers insist investors are not working on right now!
We know better. We know that the biggest risk for investors is to change course, perhaps to panic, to face uncertainty in the headlines, and to make mistakes. Vanguard policies for investment success, intended to guide investors steadily toward their long-term horizons, are probably no more effective than this period.
The choice that brings so many notifications gives investors an unusual opportunity to determine how comfortable they are with the uncertainty, an event that reflects our investment policies.
‘But this time is different’
It is fair to say that this selection presents some unusual situation for the market. When we hear “but this time is different” with every presidential election, there is a grain of truth in this time’s demand. The backdrop of 2020, including the epidemic that presents the world economy with its biggest challenge in decades, resonates with the sentence. Given the potential for a significant number of Americans to vote in the mail in response to the epidemic, we do not immediately know who has been elected president.
Such a situation would take uncertainty to another level – and make our investment policies more important. But what is good for the portfolio is no different from past election cycles. Rapidly changing courses, changing portfolios in response to short-term events, do not work even in unusual situations.
Those who would speak in favor of adjusting the portfolio based on the candidates ’proposals would be well aware that the policy proposed today may differ very much from the policy implemented in the end যদি if it is applied at all. Investors who want to make progress in development not only need to accurately predict the outcome of the election, they also need to have the right policies on what policies can be implemented and how they can work in the market with other policies. This is a calculus that challenges even professional money managers.
Concerns about potential election-related volatility need to keep in mind that volatility works in two directions, the best and worst trading days often occur in close proximity to each other, and the timing of exit from the market can be reversed if you do not do it properly. Time to return.
You have control
Remember that long-term investment success does not depend on short-term market development. It depends on economic growth, interest rates, productivity, innovation and dozens of other factors. And it depends entirely on investing in the market in the long run according to your well thought out investment plan.
Our policies focus on what investors can control: having clear, appropriate, achievable goals; Development of an appropriate resource allocation using widely diversified funds; Keep investment costs low; And maintaining vision and long-term discipline.
What happens goes out of our control. The U.S. presidential election gives investors a unique opportunity to make sure that the things that are really important to their success are under their control.
All investments are at risk, including the potential loss of money you invest. Be aware that financial market fluctuations and other factors can reduce the value of your account. There is no guarantee that any specific asset allocation or combination of funds will meet your investment objectives or give you a certain income level.
Diversity does not guarantee gain or protect from loss.
“Unusual Opportunity for US Elections”,