Vijay's View: 6 Keys To Managing Investments During an Election

August 10, 2024  4 MIN READ 

Written by Laura Beck Edited by Amber Barkley

Election season is here — and along with the usual ads and non-stop texts, there’s going to be some anxiety about your investments. GOBankingRates spoke with financial advisors to find out what people should do right now when it comes to their portfolios.

Consider this advice from financial advisors to manage your investments during this election year.

Stay the Course

Probably the most consistent recommendation is the simplest: Stay the course. Vijay Marolia, managing partner and chief investment officer of Regal Point Capital, was bully on this point.

“Keep in mind that elections have historically had less than significant impact on short term returns for U.S. stocks,” he said. In other words, your portfolio isn’t likely to go haywire just because there’s a new face in the Oval Office.

Keep an Eye on the Fed

While everyone’s obsessing over red states and blue states, Marolia suggested paying attention to a different color: green.

“The bigger impact will come from the Federal Reserve’s interest rate policy,” he said.

So you can spend less time doom-scrolling election news and more time reading up on what’s happening at the summer Olympics.

Diversify Like There’s No Tomorrow

Aaron Cirksena, founder and CEO at MDRN Capital, is all about spreading your bets.

“The best thing to do is diversify your investments to help balance any unexpected market fluctuations,” he said.

It’s like having a potluck dinner instead of betting your whole meal on one dish — if the meatloaf flops, at least you’ve got backup!

Don’t Sweat the Small Stuff

Anthony DeLuca, expert contributor for Annuity.org, wants you to zoom out a bit.

“Surprisingly, only one year prior and one month after a presidential election do markets experience more volatility compared to non-election years during all other time periods,” he said.

So unless you’re planning to cash out your entire portfolio in the next few months, you can probably relax.

Know Your Sectors

DeLuca offered some insider tips on which parts of the market might get a little extra attention during election season.

“Regarding President Trump or Vice President Harris, the biggest sectors to eye are health, defense and energy,” he said. “Because of the current tariffs in play, international and emerging could also be affected.”

It’s like knowing which rides might get a little bumpy at the amusement park: Forewarned is forearmed!

The Core + Satellite Approach

For those feeling a bit more adventurous, Marolia’s got a pro tip: “Most active professional investors will use a Core + Satellite approach: Keep your long term strategy into core holdings and use satellite investments — stocks and options used as leverage or as a hedge,” he explained.

Basically, you keep the standards and then branch out with some investments you think might do well right now.

The Final Word

At the end of the day, DeLuca pointed out, it’s not all about who’s in the White House.

“The reality: The Federal Reserve Board has more controlling power with the Fed fund rate than the policies of any president,” he said.

So instead of spending so much time worrying about how election night will affect your portfolio, you can use that time to plan your long-term financial goals.