We are in an election year with the first debate next Monday, so we wanted to take a moment to address a question that will be asked at great lengths…. What will happen to the markets if Clinton/Trump wins the election?
I guarantee you will find some pundit on TV blaming the markets rise/fall on the election polls. We would argue that in the end it is earnings, which go up over time as our economy grows, that drive stock market returns. It is interesting, that no matter your party affiliation, companies will adjust to our political environment as can be seen in the chart below which covers the last 70+ years.
Why does this happen? The easy answer is Capitalism, which is a beautiful thing. Businesses will adjust to the policies that our illustrious politicians create. PERIOD!
Investing is a marathon not a sprint, so don’t get too focused on the upcoming political drama.
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