With the 2020 campaign starting to rev up, what should investors expect next year? Besides a barrage of round-the-clock ads, soundbites and photo-ops jockeying for your attention, election years are generally favorable for stocks. Why? Not because stocks prefer certain candidates or parties. Fisher Investments' advice? Tune out the loud political rhetoric and set aside any and all political biases—which can hamper investment decision-making. Instead, fathom what few appreciate: The falling uncertainty as election outcomes are decided is likely bullish in 2020, regardless of who prevails.
As hype over candidates' policies grows, many investors fall into the trap of believing stocks have a better chance if their preferred party or politician looks likely to be in charge. If they aren't, trouble awaits. But this is bias talking. A review of history shows neither party is innately good or bad for markets. That is why Fisher Investments urges staying politically agnostic when making investment decisions. Basing them on whether you like (or dislike) the party in power can be hazardous to your portfolio! Hence, we focus our political analysis on potential election outcomes' likely impact on markets.
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