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How To Prepare Your Portfolio for Any Outcome of the 2024 Presidential Race

Prepare Your Portfolio

The impact of who will become president in 2024 is on the minds of many investors. According to a Janus Henderson survey of 1,000 investors, 49% of those surveyed said they were “very concerned about the 2024 presidential election.”

By comparison, 35% of the respondents said they were very concerned about persistent inflation, while only 29% cited the risk of recession.

Perhaps not surprisingly, older investors nearing retirement or already in retirement were more likely to express heightened concerns about the election than younger investors.

It’s understandable some investors are feeling anxious over the possible economic and market fluctuations that may result from the election. As we discuss in this article, some of this anxiety is based on market myths.

More importantly, however, are the key strategies you can implement now to prepare your portfolio regardless of who wins the presidential race.

How Political Uncertainty and Myths Impact the Markets

Many myths about elections and their impact on investments abound. For example, a common myth is that stocks plummet during election years. Truth be told, the difference between presidential election and non-election years is slight, with the S&P 500 returning on average 7.5% during election years versus 8.0% in non-election years.

Another myth is that the markets will tank if a certain candidate wins. For the most part, markets react to what is going on in the broader economy and not which candidate is victorious.

If the economy is already on the verge of recession (as it was during the Barack Obama versus John McCain election of 2008), that will be the primary force driving the markets.

Rather than panicking over these election myths, savvy investors should stay calm and implement our following top three tips.

Tip #1: Diversify Your Portfolio Across Asset Classes

Many investors find that precious metals—such as gold and silver bullion—play an important role in both portfolio diversification and wealth preservation. That’s because gold and silver function as a stable store of wealth, enabling investors to ride out market volatility and economic downturns.

And let’s not forget platinum and palladium. Bullish precious metal investors often add platinum and palladium to their portfolios for even more diversification.

Another benefit is that precious metals can be an effective hedge against inflation, unlike cash which depreciates and loses purchasing power as inflation ramps up.

By diversifying your portfolio, you’ll spread your exposure to different investments. This mitigates risk as you’ll reduce your overall exposure should any one investment suffer a downturn.

Tip #2: Revisit Your Financial Plan

One of the best ways to protect your investments during political uncertainty is to monitor and review your financial plan for potential weak spots. As part of your financial planning, you might try scenario analysis, where you evaluate how your portfolio might hypothetically perform under varying market conditions. You can use this strategy to identify vulnerabilities in your portfolio and adjust your allocations accordingly.

Additionally, you should review your portfolio to determine if it still aligns with your long-term goals, making changes if needed. By taking these simple steps, you’ll be prepared for any economic shifts arising from the election.

Tip #3: Protect Your Investments with Risk Management Techniques

While there is no such thing as an entirely safe investment, you can use risk management strategies to assess, manage, and mitigate your losses. For example, as market volatility increases, you could use a risk management strategy to shift your investments to safer, more stable options like precious metals.

You might invest more in fixed-income investments, such as government bonds, which are less volatile than stocks but still provide interest payments.

Cash equivalents are a good choice for stability and liquidity during market downturns. Precious metals, particularly gold and silver bullion remain stable even in times of political turmoil, which is why we advocate those as a way to shore up and preserve wealth during election cycles.

Navigate Market Volatility Safely with CMI Gold & Silver

No matter who becomes the 2024 president, you’ll want to be ready to adapt to changing conditions. Gold and silver offer investors the ideal investment to help diversify and secure your wealth during times of economic uncertainty. Visit our site to read and learn more.

 

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