Time in the Market not Timing

Googins Advisors August Newsletter

August 9, 2024

POLITICS

We’ve heard it before: each time the Presidential Election comes around, it sounds so logical that whoever is elected President will have a huge effect on the stock market. But it is not true.   

Charlie Munger, recently deceased and long term partner to Warren Buffet and Berkshire Hathaway is known for many quotes.  People questioned him, “Is it a good time to invest before a presidential election?” Yes. “How about during an election?”  Yes.  “And, after an election?” Yes.  Long term investing works!  Why is it so hard for people to believe?

American Funds, the Capital Group, writes about the elections. 

  1. U.S. stocks have trended up regardless whether a Republican or Democrat won the White House.
  2. Primary season tends to be volatile, but markets have bounced back strongly afterward. 
  3. Investors often get nervous and move into cash during election years.
  4. Staying on the sidelines has rarely paid off.  Money market funds, treasury bills and CDs are the sidelines.
  5. Politics can elicit strong emotions and biases, but U.S. Stocks have trended up regardless of whether a Democrat or Republican won the White House.
  6. Stocks with strong long-term fundamentals win.  Fundamentals are all the good things someone can find out about the company. 
  7. There is no sector of the economy that has done particularly well during an election.
  8. Election year volatility can create buying opportunities for long-term investors.

It is TIME IN THE MARKET, NOT TIMING THE MARKET.  We’ve tried timing the market, it does not work and likely will drive you ‘crazy’!  Many smart people will attempt to convince you there is something bad you should pay attention to today, tomorrow and next year, but how many of them ever brag how right they were with a prediction, except those that have advised staying in the market over the years?  Live through a few Bear Markets with good investments and you will see the wisdom.  Stocks dropping for a few days or years is a normal occurrence.  Life is good, not bad, living in the U.S. is good, not bad.  Believe it!

When the going gets tough, the tough get going!

Call us, we love helping.  Understand and stick with the principles listed.  They work!

Sincerely,

Louise Googins, President, Investment Advisor

Michael Googins, Administrator

Kim Rankin, Accountant

Richard Martin, Investment Advisor

Lynne Goldsmith, Investment Advisor

Dayton Hoffmann, Investment Advisor

Posted on August 9, 2024 by - Newsletter