The upcoming election makes a lot of investors nervous. In particular this election has everyone on edge. It certainly looks as if there could be turmoil around the time of the election, particularly if there are legal challenges and delays in determining the winner. Such turmoil will of course be temporary - and we know we can live through that. But the bigger question on many people's minds is what happens next? Most people like to assume that the world will be a better place if "their guy" wins. And if the world is a better place, then, well, stocks will probably do better too. But what is the past evidence on this? Do Republicans have a better track record than Democrats as far as stock prices? And just how important is the occupant of the White House.
I am always impressed by the folks at Dimensional Funds. They are some of the sharpest minds in the investment world, in my opinion. This short video illustrates their take on elections, the importance of the presidency on stock returns, and how we might want to think about the election when it comes to our portfolios. I hope you find it compelling.