06 Sep I’m concerned about political violence. Should I change my portfolio?

Q. I know this may sound crazy but I’m concerned about political violence in this country. All my assets are here, 75% stocks, 25% bonds. The stock portion is maybe 20% international and the rest is domestic. With uncertainty, what should I be thinking about for my investments? They are mostly in a 401(k) and IRAs and I’m 47.
— Investor

A. It is understandable to feel uneasy heading into an election season.

Emotions are running high as many people feel very strongly about their political positions and how they want to see this election play out.

However, when it comes to being a long-term investor, you need to expect volatility, which can happen for a variety of reasons, said Michael Cocco, a certified financial planner with Beacon Wealth Partners in Nutley.

“Market volatility and market corrections are very normal in historical context, and even though the exact circumstances are different each time, the end results have generally been the same,” Cocco said. “This is not the first time we’ve faced political volatility in our country, and probably will not be the last.”

He said it’s possible that the market may get bumpy in the short-term, but trying to time the ins and outs of the market around a particular event is very difficult. In fact, you could do yourself more harm than good, he said.

That’s why your overall goal when it comes to investing should be to design a portfolio to fit your personal objectives, risk preference and time horizon, Cocco said, noting it’s important to not let short-term fluctuations — no matter how uneasy they may make us feel — dictate your long-term plan.

“At age 47 and speaking predominately about your retirement accounts that you don’t plan on touching for 15 to 20 years, you are still a long-term investor, and as long as your tolerance for risk and your personal situation will allow it, investing rather aggressively seems appropriate at this stage of your life,” Cocco said.

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This story was originally published in September 2024.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.