After a historic week following the results of the 2024 Presidential election, markets and investors have naturally shifted their focus to what happens next. From a pure investment standpoint, U.S. equities have broadly rallied following the results, with Small- and Mid-Caps leading the way while International Equities and Fixed Income declined. Part of the overall relief for markets could be chalked up to less overall uncertainty. A quickly announced winner lends itself to reduced fears of potential unknowns, making the go-forward picture easier to focus on. Further supporting less uncertainty, the Fed also cut interest rates this week in line with expectations causing minimal reaction from the markets, which is an encouraging sign of increased calmness.
That being said, the go-forward picture will be constantly evolving. Investors should keep in mind that financial markets have historically performed well under every mix of political makeup, and even the most direct political goals from one party often materialize in the final public markets in different ways than expected. In the context of a 10-, 20-, or 30-year financial plan, the overall impacts of any four to eight-year presidency, often between alternating political parties, becomes even more dampened.
That’s not a license to wave away whatever the next months or years will bring. New opportunities and challenges will emerge. Opportunities for outperformance are always present, and our Investment Committee will remain focused on capturing those in the most risk-aware manner that we can, while utilizing independent research to support the portfolio’s long-term goals. We remain committed to making portfolio changes founded on evidence-based data and relying on both our external models and internal discussions.
Our advice consistently is to focus on your long-term objectives and plan. Political impacts only tell part of the story for the economy and broader financial markets. The bedrocks upon which we build our portfolios are diversification, rebalancing, and tax efficiency, which are as important as ever to helping achieve long-term goals under a variety of economic and political cycles.
As your financial advocate, being stewards of your hard-earned capital is work we do not take for granted. If you have any questions about your investment strategy or portfolio, please do not hesitate to reach out to your JNBA Advisory Team.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors, LLC.
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