I like this quote from Neil deGrasse Tyson’s new book, “Starry Messenger” regarding the media’s market comments.
“The major averages rose on Friday extending Wall Street’s strong rallythis week despite inflation hitting a 39-yr high.” (CNBC)
He continues. “But if they were being honest they would say:
The market rose today. We have no clue why and remain dumbfounded.”
Ok, lesson over. Let’s talk about the midterm election and how it could impact markets.
Regardless of our personal feelings about election results, history tells us that markets generally prefer a divided government.2
Why? Markets like certainty. And splitting governance between both parties typically means fewer sweeping policy changes that could introduce uncertainty.
You can see in the chart below how markets have performed (on average) depending on which party controlled Congress when a Democrat was in the White House.
Does this mean we can count on a rally?
No. Mainly because markets are driven much more by fundamentals and economics than politics.
And, political gridlock is not always good. Brinksmanship over issues such as debt ceilings, federal budgets, and government shutdowns could cause instability and market volatility.
It’s easy to let the whirlwind of headlines and uncertainty draw us into short-term thinking and worry about the future.
But what if we consciously paused and asked a deeper question?
What are you grateful for right now?
Here’s what some of my clients are grateful for…
“I’m grateful for the medical professionals who have help me when I was, ill or had injuries. I’m grateful for my siblings and kids- some of the finest people I know. I’m grateful for my pets. I’m grateful for you Gary, as I move on from my marriage with my financial adventure.”
– J
“Curbside garbage collection AND recycling? Woot! WOOT!!
– B
Indoor Plumbing? Electricity? Corrective lenses? Antibiotics? Pain killers? Good Neighbors? Fingers AND toes? 🙂 “
“Meeting you through that on- line workshop has changed the way I think about my money. I appreciate all the advice you have shared.”
– R
“Living mindfulness at every single moment likes practicing Vipassana meditation!”
– S