The Game of Politics and Your Money
In some ways, the political season is very much like football season. The press peppers key players with questions in the hopes of getting a few moments of sound bites around which they can construct a story. As the temperature drops the heat steadily increases until a victor ultimately emerges. But in some ways politics can be even more exciting than football. After all, if your favorite team wins or loses how are you affected? Maybe pride or bragging rights but those things are relatively unimportant in the grand scheme of things. The issues currently facing us on the national political landscape will affect everyone and there is much discourse from both sides why their candidate is the better choice.
While I try to maintain a professional, apolitical neutrality, I have heard from many clients (both Republican and Democrat) why they fear the opposition. Most of these discussions are financially relevant as the client wants to position themselves (and their investment portfolios) to be protected against a political "loss" and to benefit from a political "win".
A recent article by Knowledge@Warton, Back to the Future: What's at Stake for the Economy in the Obama-Romney Contest provides a well-constructed perspective by three Wharton School of Business professors that it does not matter who wins. Whoever occupies the White House for the next four years has a number of challenges to face; many of which are more influenced by a divided government in Congress than the leader of the Executive Branch.
The moral of the story is one we have professed for decades; your investment allocation should be based on your needs, goals, and risk tolerance. Everyone can make a good prediction occasionally. No one can make an accurate prediction every time. Portfolios which are driven by short term market timing often perform poorly in the long run.
DSCF0048BYU vs. Notre Dame Football Game at Notre Dame photo by bterrycompton