Stepp Up

Do fundamentals or politics drive the economy?

Episode Summary

There is – and always has been – much more than politics driving our economy. Don't get blown over by the political winds swirling around us today, argues Stepp & Rothwell Managing Partner Ken Eaton. Stay the course and continue to invest based on your long-term goals.

Episode Notes

The elections loom. The market is gyrating. The economy is facing multiple challenges.  

Will the elections make any difference? Not as much as you might think.

From 1952 to today,  according to Forbes magazine, the stock market notched an average annual return of 10.6 percent while a Democrat was in the White House and 4.6 percent while a Republican was in office.

The difference is almost totally because George W. Bush presided over two bear markets.  

Presidential policies might provide headwinds or tailwinds. But other powerful forces are at work, including actions of central banks, other governments, global organizations, natural disasters and, perhaps most powerful of all, the business cycle. 

Over the long run, and regardless of which party is in power, the market always has grown. 

Our advice: Stay the course and invest based on your long-term personal goals. Ultimately, a well-designed, balanced portfolio will prove more valuable to you than any President.