Financial Market Update - Q4 2024

Stay the Course

Investing Through the Noise

By Peyton Gentry

Boy, 4 years went by in the blink of an eye, didn’t it? It feels like just yesterday we were in the throes of the 2020 election cycle. Our television screens and social media feeds were flooded with an onslaught of negativity and mud-slinging promises telling us “If the person we don’t like gets their way, you can kiss the future goodbye”. In my world of financial planning, you didn’t have to look too hard to find “experts” on both sides of the fence predicting wildly negative outcomes for our retirement accounts based on November’s results.

There is one problem with applying this line of thinking to our retirement saving… history has proven that the market really doesn’t care what happens in November. There have been 20 election cycles dating back to 1936 (the middle of the Great Depression). Throughout these presidential terms, we have endured wars, terrorist attacks, natural disasters, pandemics, bank failures, interest rate spikes, housing bubbles, and every other crisis you can think of. When these crises consume our lives and the media, it would be easy to assume that panicking and pulling the plug on our retirement savings plan is a wise decision. Wouldn’t we be better off just burying our money in the backyard and hunkering down?

History gives us a pretty clear answer: no.

You see, an investment made in January of a presidential election year saw a positive 10-year return 19/20 times. That same 10-year investment was worth more than double in 12 of those 20 periods. And that 1 time out of 20 that it was negative, it turned positive if you waited 3 months.* Twenty elections that resulted in 11 Democratic presidents and 9 Republican presidents. And there really was no clear advantage one way or another.

So, here we are 4 years later. Buckling up to do it all over again and hearing the exact same fear-based “advice” dressed up in a fancy new suit. This election will come and go, as the last 20 have. A new president will be sworn in on January 20th, and the fear, panic, and negativity on our screens will shift their focus to the next flavor of the month. The wise investor will base their investment decisions on their personal financial plan, not the noise. They will stay the course in their personally tailored, diversified strategy that THEY built with the help of their advisor.

We’re Americans, after all. Since when do we let other people’s opinions make our decisions for us?

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*Return data based on an investment in the S&P500 Index with dividends reinvested.

Peyton Gentry is a Registered Representative offering Securities through The O.N. Equity Sales Company, Member FINRA/SIPC, 4585 State Route 39 PO Box 250 Berlin, OH 44610 (330) 893-2600. Investment Advisory services offered through Hummel Wealth Management, LLC and O.N. Investment Management Company. Hummel Wealth Management, LLC is not affiliated with The O.N. Equity Sales Company or O.N. Investment Management Company.

The information discussed is educational in nature and is not and should not be construed to be investment advice, nor a recommendation to purchase or sell any investment product or security. All investing involves risk, including the possible loss of principal, and there is no guarantee that any investment strategy will be successful.

Past performance is no guarantee of future results.

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www.hummelfinancialadvisors.com

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