We’re just a few weeks away from the first caucuses and primaries, so presidential election season is in full swing. As a voter, you may be keenly interested in the election process. But as an investor, should you be concerned?
If you take a look back, you might be somewhat encouraged over the prospects of the financial markets this year. In the last 12 presidential election years, the Dow Jones Industrial Average has been up nine times and down just three. So, election years must be good for the financial markets, right?
Not necessarily. In every year, the markets are influenced by a variety of factors: interest rates, inflation, corporate profits, geopolitical events, economic growth, even the weather. And it’s safe to say that 2016 will be no different. At this early stage of the year, one could say that some of these factors, such as continued low interest rates and a reasonably strong economy, might bode well for investors. But there’s a lot of 2016 ahead of us – and it’s notoriously difficult for anybody, even so-called experts, to accurately predict the market’s performance over a relatively short time, such as a year.
