What New Leadership in Washington Historically Means for Markets
February 23, 2021 •Austin Bryan, CFP®, Senior Advisor
Introduction by Austin Bryan, CFP®, Senior Advisor
Long-term plans often come into question during years of uncertainty and change. 2020 brought us more than our fair share of change and with it the question: What does new leadership in our government mean for my portfolio? To add more to the email sent out at the end of September we are including a piece from Dimensional Fund Advisors dealing with the importance of sticking to your plan in the face of change.
“It’s natural for investors to look for a connection between who wins the White House and which way stocks will go. But shareholders are investing in companies, not a political party. And companies focus on serving their customers and helping their businesses grow, regardless of who is in the White House. Stocks have rewarded disciplined investors over the long term, through Democratic and Republican presidencies. Making investment decisions based on the outcome of elections, or how investors think they might unfold, is unlikely to result in reliable excess returns. On the contrary, it may lead to costly mistakes. Accordingly, there is a strong case for investors to rely on a consistent approach to asset allocation—making a long-term plan and sticking to it.”#2
Distribution of Monthly Returns for Fama/French Total US Market Research Index January 1926–June 2020
Past performance is not a guarantee of future results.
In US dollars. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. The tallest bar shows all months in which returns were between 0% and 1%. Dashes representing returns for a given month are stacked in ascending order of return within each column, with highest return within that range on top.
Conclusion by Austin Bryan, CFP®, Senior Advisor
Looking back on investing and the markets in 2020 is a reminder of the volatility and risk that can be associated with investing. The returns we look for are created by the risk associated with holding underlying investments, including risks outside the market. While this past year has created a lot of change, we continue to hold fast that a disciplined, long-term approach to the markets with sound financial planning will help reach our financial goals.
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INFORMATIONAL PURPOSE ONLY. This content is for informational purposes only. This content does not constitute professional advice and should not be relied upon by you or any third party, including to operate or promote your business, secure financing or capital in any form, obtain any regulatory or governmental approvals, or otherwise be used in connection with procuring services or other benefits from any entity. Before making any decision or taking any action, you should consult with professional advisors.
This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of 10/30/2020, and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
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