07 Nov The election and dad’s portfolio

Q. My father, 90, says he will take all his money out of the stock market if it looks like Clinton will win. Does it really matter who wins the election?
— Not a market timer

A. This is a popular question these days.

Most advisors have told NJMoneyHelp.com that in terms of an investor’s long-term portfolio, it doesn’t really matter who wins the election.

There could be an immediate impact — one way or another.

But in a few months, it won’t make a difference. If you need the money sooner, it doesn’t belong in the stock market.

A look a historical market performance is worthwhile here, said Chip Wieczorek, a certified financial planner and investment adviser with Tradition Capital Management in Summit.

He said over the past five election cycles, the S&P 500 has finished anywhere between up 1.5 percent to down 5.3 percent the day after the election. One week after the election the S&P 500 finished between up 3 percent to down 10.6 percent. And by the end of the election year, the S&P 500 finished between up 7.2 percent to down 10.2 percent.

“If Clinton wins, and there is at least a divided Congress, you will most likely see short-term volatility but the markets will be calmed because it will be difficult to get consensus on her agenda items easily,” Wieczorek said. “If Trump wins, we feel there will be more volatility and for longer, he will need to spell out his economic policies in short order to provide the markets some stability.”

Wieczorek said it’s impossible to predict the highs and lows of the market and a bet against the U.S. economy has been a bad bet since our nation was founded.

“Although we are not perfect, we have the best education system in the world, the strongest military and the most pro-capitalism economy around,” he said. “The Dow started at 60 in 1900 and ended the century just over 11,000.”

“Through that we have had two world wars, a president assassinated, a great depression, multiple financial crisis and the economy still moved forward,” he said.

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This post was first published in November 2016.