Image source: J.P. Morgan
During US elections, investors are always curious about how political changes might affect financial markets. The market often becomes more unpredictable because investors are unsure about how new policies from potential candidates could impact different parts of the economy.
When candidates promise to pass new laws during their campaigns, investors may try to guess how those laws will affect the sectors they are invested in, and may decide to make changes to their portfolios based on those predictions. Possible government projects may also prompt investors to move their money into other industries, like construction, when they would be better off leaving their investments where they are.
It is this investor uncertainty that can really change how markets behave, however the good news is that it tends to be a short-term effect. In the long run, markets tend to do okay, as illustrated above.
It is extremely important for investors to know how to handle these uncertain times. Here are some things you can keep in mind as an investor during election years:
By understanding how markets have behaved in the past, spreading out investments, and getting advice from professionals, it's possible to stay on track with your financial goals even during these unpredictable times.
To ensure you are on the right track with your finances, book your free consultation today.
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