At this point we are several weeks removed from the 2024 U.S. presidential election. Since election night I have been observing the reaction to the election results and as you can imagine, one side is super excited and the other not so much. Is so prevalent within our culture that CNBC reported recently that if you voted for Trump, you are likely to spend more this holiday season.
Jaimee was working at Vanguard during the 2016 election and one day she came home from work sharing a story about how a client was so certain that Trump would ruin the economy, that he made a million-dollar bet that the markets would crash. It didn’t. Ouch.
It goes without saying, that making speculative bets based on election outcomes is not a smart idea.
I have seen over and over again how fear and despondency are dangerous emotions that cause harm to your overall financial well-being. However, I also argue that unchecked euphoria is just as harmful.
When Trump won the 2016 election, we saw a lot of news making the rounds on financial media about how the energy industry was going to benefit from Trump’s “drill baby drill” policies.
After Trump took office, the market was flooded with cheap oil/gas. When the supply of energy was high and demand stayed the same, profit margins started to shrink and the energy sector of the S&P was the worst-performing sector for the next 4 years.
Regardless of the election outcome and how you feel about it, I think it is only wise that we curb our euphoria and optimism, and have the humility to take a loss well.
Stay the course, focus on your financial plan, and you will be rewarded.
-Daniel Carnes Investment Analyst
