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Investing in a highly politicized climate

SEP. 10, 2019

Investors have a lot on their minds these days, from trade negotiations, to geopolitical tensions, to a potential global economic slowdown and possible recession. There’s also a U.S. presidential election on the horizon, adding political noise to investors’ desire for clarity and understanding.

Investor perceptions of risk and reward influence the decisions they make in their portfolios—and political leanings can distort these perceptions. Politically-inclined investors tend to see the markets as less risky and more attractive when their preferred party is in power. In contrast, those whose party is out of power are likely to feel more pessimistic and see greater risk in the markets.

In this age of information abundance, how should investors read and use the news for their benefit? Tune out the noise if you’re looking for prudent guidance and actionable insights. Then, pay attention to the fundamentals, which have a bigger influence on market value than the fickle winds of the political climate.


  • This material is not a recommendation to buy, sell, hold or roll over any asset, adopt an investment strategy, retain a specific investment manager or use a particular account type. It does not take into account the specific investment objectives, tax and financial condition or particular needs of any specific person. Investors should discuss their specific situation with their financial professional.

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