Within the past week we have experienced the “Super Tuesday” Primaries and a State of the Union speech that sounded much like a campaign event. Friends, like it or not, we are speeding headlong into another Presidential election year.

This will be the 8th Presidential election that has occurred since Master’s was founded thirty years ago! It is safe to say that the most common question we have gotten during each of those eight years is, “How should we be investing during this election year?” That one question is based on other underlying questions such as, who will be our next President? What will their tax & economic policies look like? How will the markets react to this President’s regime?

I recently saw an excellent electronic brochure titled “Investing in an Election Year.” The widely esteemed Capital Group (parent firm of the American Funds) did the background research & published this informative piece. It does an excellent job of answering this question based on historical market data. Their research spans over 90 years of market data and includes twenty-three election cycles. You can click on this link to view this electronic document.

The following points summarize some of their material.

• There has not been any evidence to support that a victory by one party, or the other, makes any measurable difference, or likelihood, of more favorable investment market performance!
• Contrary to popular opinion, there is more market volatility (risk) during the year leading up to the election, not in the period following the election.
• Historically, staying fully invested during a Presidential election year has produced the best results. Systematic investing (sometimes known as Dollar-Cost-Averaging) was the next best performing strategy. Sitting on the sidelines (or taking a wait-and-see approach) was the worst performing strategy, by far!

Doing your personal due diligence and supporting the candidate that most closely aligns with your beliefs and values is especially important! Voting is a privilege that we enjoy in this great country which others, in many countries, do not! However, history has shown that we should not let our political allegiances taint our long-term investing perspective.

If you would like to discuss these thoughts further, please contact us. We will help you to re-focus on the items you can control, instead of the ones you cannot. We will be glad to further explain our confidence in staying invested using highly disciplined asset allocation strategies, or utilizing dollar-cost-averaging if you want to take a bit more cautious approach to adding larger deposits into your investment accounts.

Thank you for the trust & confidence you continue to place in us. We do not take it lightly!