45% of investors, regardless of political affiliation, believe the results of the 2024 U.S. federal elections will have a bigger impact on their retirement plans and portfolios than market performance, according to Nationwide Retirement Institute data from Advisor Authority survey.
Investors consider the history of market performance and understand that, typically, the outcomes of presidential or congressional elections are not the best indicators of long-term market performance.
Another key finding of the study is that investors fear the impact of new policy and opposing party rule on the U.S. economy.
32% of investors believe the economy will plunge into a recession within a year if the political party with which they least align gains more power in the 2024 federal elections.
What’s more, 31% believe the party they least align with gaining more power in office will negatively impact their future finances, and 31% believe their taxes will increase within 12 months.
The risk of a recession or other adverse economic outcomes is more likely to be driven by the underlying fundamentals occurring in our economy as opposed to short-term policy decisionsEric Henderson, president of Nationwide Annuity at Nationwide Financial
A good investment strategy should focus on long-term goals — not a prediction of what might happen shortly after the next election.
In terms of partisan opinion, the study also found that Republicans expect the worst, with 68% of investors who identify as Republican saying the outcome of a presidential election will have a direct, immediate, and lasting impact on the performance of the stock market. By contrast, only 57% of Democratic investors share this sentiment.
If you’re considering making changes to your portfolio or investment strategy based on what happens, or what you think may happen, in the 2024 election cycle, analytics strongly recommends you sit down with an advisor or financial professional who can provide a third-party, non-biased perspective on any moves you may be considering.
by Yana Keller