In the year With the 2024 national elections fast approaching — and the buzz around them growing — investors are not just taking notes, but worrying about how they will affect their portfolios.
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In fact, nearly half (45%) of investors, regardless of political affiliation, believe the results of the 2024 US federal election will have a greater impact on their retirement plans and portfolios than market performance. This data comes from the National Ninth Annual Counseling Authority Survey and is powered by the National Retirement Institute.
Asked if the finding was surprising, Eric Henderson, president of Nationwide Annuity, said it was. He suggested that investors consider the history of market performance and understand that presidential or congressional election results are typically not the best indicators of long-term market performance.
“When you’re investing with long-term goals in mind, the next four years are just the next part of your journey, so don’t fundamentally change the strategy that’s designed to be successful 20 or 30 years down the road,” Henderson said.
He added, however, on the other hand, that Americans are understandably prone to emotional reactions in today’s polarized political climate.
He added: “The messages from the political sector can be scary and overwhelming – and the danger is that fear can lead to short-sighted decisions.”
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Recession fears increase among investors.
Another key finding of the study is that investors fear the impact of the new policy and opposition party regime on the US economy.
For example, 32 percent of investors believe the economy will fall into recession within a year if a less-affiliated political party gains more power in the 2024 federal election. What’s more, 31% believe that a party with which they are less aligned with having more power in power will negatively affect their future finances, and 31% believe that their taxes will increase within 12 months.
However, according to Henderson, it’s too early to predict what the economy will look like after the 2024 election.
“The risk of a recession or other negative economic outcomes is more likely to be driven by fundamentals in our economy as opposed to short-term policy decisions,” he said. A good investment strategy, however, should focus on long-term goals — not predicting what might happen shortly after the next election.
Across partisan lines, Republicans also expect the worst, the survey found, with 68% of investors who identify as Republican saying the outcome of the presidential election will have a direct, immediate and lasting impact on stock market performance. In contrast, only 57% of Democratic investors share this sentiment.
Henderson emphasized the importance of remembering that the stock market has always been bullish regardless of which side has been in control throughout history. He believes that there is no indication that the results of the 2024 election will make a difference.
“Time will tell if the election will make a difference in the near future, but the fundamentals of long-term investment cannot change in 2024,” he said.
If you’re considering making changes to your portfolio or investment strategy based on what happens in the 2024 election cycle, Henderson says he strongly recommends sitting down with an advisor or financial professional who can provide a third. -Party, an impartial view on any activities they may consider.
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This article originally appeared on GOBANkingRates.com: How Investors Should Prepare Finances and Retirement Plans Before the 2024 Election (Say 45% Matters More Than Market Performance)