Episode 140: Politics and Your Portfolio- Navigating the Impact of Elections on Financial Health

Can the upcoming election make or break your investment portfolio? Join me, Stacey Hyde, as I dissect how political shifts historically influence markets, and debunk the myth that one party is always better for your financial health. We'll explore why a divided government might actually work in your favor, mitigating extreme policies and promoting balanced decision-making that appeals to the majority.

Beyond the political landscape, I emphasize the critical need to diversify your news sources to avoid the echo chambers of social media algorithms. From the unintended consequences of student loan forgiveness to the real-world complexities of various political proposals, this episode aims to equip you with the knowledge to make more informed and nuanced financial decisions. Tune in for a balanced, insightful conversation on how politics and financial health intersect in today's highly polarized world.

 Envision Financial Planning. 5100 Poplar Avenue, Suite 2428, Memphis, TN 38137. (901) 422-7526. This communication is strictly intended for individuals residing in the United States.  Advisory Services offered through Envision Financial Planning, a Registered Investment Adviser.

Transcript

Speaker 1 0:00

Hi , I'm Stacey Hyde and I'm back for another episode of Better Financial Health in 15 minutes or less , and today I'm going to tackle a topic that I don't really want to talk about on our podcast , but it's a question that I get at least daily , and oftentimes multiple times a day , and that's about what is this election going to do to my portfolio , or how is it going to impact the economy ? And it really doesn't matter whether somebody leans right or leans left , or leans democratic or republican . It's really a question that is on everyone's mind , and I think that it's because we've been through a lot over the last five years . You know , we've had a pandemic , we've had interest rates go up , we've had supply chain issues where we couldn't get things we needed , so I think everybody's a little bit on edge .

Speaker 1 0:57

History says that elections don't really have that much of an impact on markets . Elections don't really have that much of an impact on markets . When you look at it , you know sort of wisdom would tell you that Republicans are seen as the party of business , so a Republican president should be better for the market . But that's not always the case and actually history shows markets have actually done a little bit better under Democratic presidents than Republican presidents , but that's an average and we don't know or what I would call a purple government . So some red , some blue . So joint control of the House , senate , white House so not having all of those groups being under one party actually probably gives us a little bit better outcome , because in order to make sweeping changes we have to have agreement from people who famously don't agree on a lot . It can also cause gridlock and can take decisions longer to make . But at the end of the day , in order to get somewhere and pass some bills , you have to have some types of agreements . And , you know , in my personal opinion , I think that there's a lot of value in that , because it pulls out sort of the excesses of each side and hopefully what we're left with is something that appeals to the great middle , because I believe that the overwhelming majority of people in this country are really in the middle . You know 80% and then we've got 10% on the far left and 10% on the far right . But our primary system sort of magnifies those voices and when we have divided government it sort of brings it back to the middle .

Speaker 1 3:05

It's not always the case . Sometimes we just get good luck and it gets dumb . But one thing to keep in mind is about pay attention to how you're getting your news . Try to proactively go , search out alternative opinions , because if you don't , you're never going to get any , because the algorithms for Facebook , for Twitter , for Tik Tok , for any of the social media , is to feed you , and YouTube in particular is to feed you more of what you have shown an interest in . So if you are Trump leaning , it's going to feed you all of these things that vilify the Democratic Party and the Democratic candidates , and the reverse is also true . If you are Democratic leaning , it's going to feed you everything to keep you on that side and make everything on the Republican side look awful , and so you have to really be diligent to go out and get the other side so that you actually can make informed decisions , because we live in a soundbite world now and so and we have short attention spans because our screens have kind of trained us that way , and I think it's important for us , as Americans , to dig a little deeper to understand the nuance of these different proposals that people are making , because so many things they sound great , but then you're like , well , how does this work in the real world and you're like , oh , that's not going to work .

Speaker 1 4:50

Like , student loans sounds great , we're going to enable people to get an education . Well , it's also led to the skyrocketing cost of tuition because people can get these loans easily . It has led to school loans , the price of college , going up , and people also don't understand just how onerous these loans can be because they're not dischargeable in bankruptcy . That's just one example of something that sounds good , but you need to dig a little deeper to make sure that it's not going to be negative in reality . So there is some value , I think , for people to really dig a little deeper and not just take statements that they see online at face value , and to proactively seek out the other side or just have conversations with people who you disagree with and find out why they believe what they believe , and have conversations in real life , not on a screen or in a comment section , but to really dig deep into that , and I think that we will all be better off for that .

Speaker 1 6:05

This is a financial podcast , so my advice to you is to stay invested , stay patient , keep an emergency fund and anybody who tells you they know exactly how the markets are going to behave based on one candidate winning or another . They're telling you a lie , they're guessing , hoping they're right , and then , if they're right , they're going to try to sell something . So keep that in mind as you're listening to the pundits , and try to stay focused on your long-term goals . Thanks so much for tuning in . This has been another episode of Better Financial Health , in 15 Minutes or Less .