Whether you find the election results exciting or shocking, we are now faced with the question, “What’s next?”
With respect to your investments, here’s a quick reminder of how we feel about that: Ample evidence informs us that it is unwise to alter your long-term investment strategy in reaction to breaking news, no matter how exciting or grim that news may seem, or how the markets are immediately responding. Markets constantly process information, and security prices incorporate new or changing risks. Markets have proven far better than others in pricing these risks and determining fair value at any point in time. As we saw with the unexpected outcome of this summer’s Brexit referendum, the biggest surprise may be how resilient markets tend to be, as long as you give them your time and your patience.
In other words, if you feel you want to make changes to your investment portfolio in the aftermath of Tuesday’s election results, please be in touch with us first, so we can do the job you hired us to do. Specifically, you can count on us to advise and assist you based on our professional insights, your personal goals and – above all – your highest financial interests.
In the meantime, consider these words by billionaire businessman and “stay put” investor Warren Buffett, from his 2012 letter to Berkshire Hathaway shareholders:
“America has faced the unknown since 1776. It’s just that sometimes people focus on the myriad of uncertainties that always exist while at other times they ignore them (usually because the recent past has been uneventful). American business will do fine over time. And stocks will do well just as certainly, since their fate is tied to business performance. Periodic setbacks will occur, yes, but investors and managers are in a game that is heavily stacked in their favor…The risks of being out of the game are huge compared to the risks of being in it.”
Buffett published these sentiments on March 1, 2013, shortly after the last presidential election cycle. If you review the volume of his writings, you’ll find that he has expressed similar viewpoints on many occasions and through many markets, fair and foul.
Presidential terms are four years long. Your investment portfolio has been structured to last a lifetime. Remember that as you consider your personal “What’s next?” … and please call us if we can assist.
Other articles filed under Investing
April 21, 2017
On March 15, 2017, the Federal Reserve increased interest rates for just the third time since the financial crisis in 2008-2009. Investment theory tells us when interest rates rise, bond prices fall, so rising interest rates are bad for bond...
April 17, 2017
The stock market crash of 2008-2009 is a very recent memory for many investors who still bear the scars from the experience. At Rockbridge, we also have prospective clients who walk into our offices saying that they haven’t recovered yet...
March 23, 2017
Teachers Insurance and Annuity Association, better known as TIAA was founded almost 100 years ago (1918). TIAA provides retirement plan solutions for a majority of the higher education institutions in the United States. One type of investment, called the TIAA...
January 23, 2017
Stock Markets While markets were down early in the quarter, most, but not all, have bounced back since the Election with small company stocks and value stocks leading the way. Stocks traded in international markets and emerging markets have not...
January 17, 2017
There is much talk and concern about increasing interest rates, which will not be good for bond performance. Below are responses to some of the specific questions we have received from clients. Q: Why have interest rates increased since the...