With the November midterm elections just a few months away, campaign activity and political coverage are intensifying. Headlines can make it easy to feel as though every political development could have a significant impact on your investments and financial future.
As your advisor, one of our roles at Victory Wealth Partners is to help put those headlines into perspective.
Elections matter. Politics matter. But for long-term investors, history suggests they are only one piece of a much larger picture.
Our goal is not to predict election outcomes or react to every political development. Instead, we focus on helping you maintain a financial strategy designed to navigate changing markets, economic conditions, and life circumstances.
Midterm elections determine the composition of Congress and can influence the government’s ability to pass legislation. The results can have implications for areas such as taxes, government spending, Social Security, defense, trade policy, and other economic priorities.
With control of Congress potentially shifting, there will understandably be plenty of attention on the election in the months ahead.
As citizens and voters, these decisions are important. But as investors, it’s equally important to distinguish between what is important politically and what is likely to have a lasting impact on a long-term financial plan.
Those two things aren’t always the same. It’s natural to assume that elections should have a major influence on investment returns. After all, changes in political leadership can affect economic policy, taxes, regulation, and government spending. Yet history provides an important perspective.
Over long periods, markets have generated positive returns under different political parties, different administrations, and different compositions of Congress. Markets have also continued to grow through periods of divided government and significant changes in political leadership.
That doesn’t mean markets are always positive during election years—or that elections never contribute to short-term volatility. They can.
The key distinction is between short-term market reactions and long-term investment outcomes. For example, the 2022 midterm election occurred during a period of elevated inflation and rapidly changing interest rates. In 2018, concerns about global growth and Federal Reserve policy contributed to significant market volatility. In both cases, the broader economic environment played an important role in determining market performance.
At Victory Wealth Partners, we believe successful wealth management requires looking beyond the headlines. Corporate earnings, interest rates, inflation, employment, consumer spending, productivity, and technological innovation all play significant roles in determining the long-term direction of financial markets.
These forces don’t disappear during an election year. In fact, some of the biggest market developments in history have been driven by forces that had little to do with which political party was in power.
The technology boom of the 1990s, the housing crisis of the 2000s, the economic disruption caused by the pandemic, and the rapid development of artificial intelligence have each had meaningful implications for businesses and investors.
Political decisions can influence these trends, but they are rarely the only—or even the primary—factor driving them. It means we don’t believe your long-term financial strategy should be built around election predictions.
Instead, we focus on the things we can evaluate and control.
That includes:
- Your investment allocation
- Your retirement savings strategy
- Your cash-flow needs
- Your tax planning opportunities
- Your risk tolerance
- Your time horizon
- Your estate and legacy goals
- Your changing personal circumstances
These are the factors that should guide financial decisions—not the latest campaign headline or polling update.
That doesn’t mean we ignore what’s happening in Washington. We pay attention, evaluate potential implications, and adjust when circumstances warrant it. But we don’t want short-term political uncertainty to dictate long-term financial decisions. One of the most valuable things a financial plan can provide is perspective.
There will always be something to worry about: elections, interest rates, inflation, geopolitical events, market volatility, or the next unexpected headline. The challenge isn’t eliminating uncertainty. It’s having a plan that is designed with uncertainty in mind.
At Victory Wealth Partners, our role is to help you stay focused on your financial objectives while navigating the inevitable changes along the way. That means keeping an eye on the markets and the economy while avoiding the temptation to make significant changes based solely on short-term events.
Your financial plan should be built to last longer than an election cycle.
As the November election approaches, we’ll continue to monitor developments and evaluate whether anything meaningfully changes the economic or investment landscape. In the meantime, we’ll remain focused on what matters most: your goals, your financial plan, and your long-term financial future.
If you’re concerned about how the election or current market environment may affect your financial plan, we’re always here to talk through your questions and provide perspective. At Victory Wealth Partners, we believe confidence comes from having a plan—and staying committed to it through every market and every election cycle. We are always happy to help! Until next month!
