Page 106 - December2022

FINANCIAL PLANNING
MIDTERM ELECTIONS AND INVESTING
in the history of the world. I’m not here to get political, but please allow me to explain how the stock market tends to react to elections no matter the outcome. Everyone seems to think that the person in the white house is going to
an election to either swim or drown. They adapt. If there are tax policy changes or different regulations put in place, it’s likely that they are going to make the necessary changes to continue on as a profitable
by Cade Peterson, Financial Planning Advisor
The air seems to feel a little different when a national election is underway. We experienced that recently with the midterm elections. Every two years there’s a political battle in the country that opponents on both sides proclaim is the most important election
decide how the stock market performs. Don’t get me wrong, certain policies definitely have a play in the world of stocks, bonds, real estate and the economy in general, but it doesn’t make or break your retirement. I’m going to explain the importance of looking at the big picture when it comes to the life of an investor.
COMPANIES ARE RESILIENT
An important fact to remember is that companies are dynamic and can adapt
to many different environments. Major corporations don’t wait for the outcome of
business. I like to break it down into individual companies. Walmart went public in 1970. That’s a fair number of elections that they have experienced without closing up shop. Home Depot went public in 1981 and has adapted to different presidents and policies ever since. Coca-Cola went public in 1919. These three companies are still strong as ever. The point I’m trying to make here is that good companies are going to find ways to be profitable. I would try to avoid getting too dependent on what the white house is up to when making investment decisions.
Prices need to correct every once in a while, especially when they have gotten ahead of themselves such as during periods of speculation.
104 SPEEDHORSE December 2022