It is shaping up to be a most, uh, unusual of election years.
I’ll leave the analysis and pontificating to others.
Today, I talk about the role politics should play in your investment decisions.
Read on to learn more!
Michelle Morris, CFP®, EA
BRIO Financial Planning
Recently one of my favorite bloggers, Mike Piper of the Oblivious Investor wrote a fantastic post on not mixing politics and investing.
In his post Mike talks about the powerful emotion of fear. It’s a strange election year and many are anxious and fearful. Your political views (whichever side of the aisle you inhabit) can be exploited by sales people to sell financial products.
The pitch goes like this:
- Political event ‘X’ is almost certain to happen
- As a result, the economy will take a nosedive
- You should buy my product to protect yourself
This can be used to appeal to most any set of political views. Worried about the market being rigged by the financial elites? Worried about over-taxation, over-regulation or excess government spending? Someone has a product for you! It might be gold. It might be a market-timing newsletter. It might be an annuity. It might a hedge fund.
In order for the “solution” to work, the salesperson has to be right about the political event, right about the resulting economic calamity, and right that their product is indeed a good solution. These things all need to be true for the product to work for YOU. In order for it to work for THEM, they just need to convince you to buy in the first place.
I think Warren Buffett put it best when he said in his shareholder letter released just last week:“For 240 years it’s been a terrible mistake to bet against America, and now is no time to start.”
Tune out the noise. Stick to your plan. And don’t forget to vote.