Behavioral coaching
Addressing election uncertainty
Presidential elections matter, but not so much when it comes to your clients' investments
3 steps to guide your clients this election season
1. Show them the data
Present historical trends from past elections to show the benefits of staying disciplined in an investment plan.
2. Remind them of their long-term goals
Emphasize the rewards of maintaining a balanced portfolio and long-term perspective through periods of uncertainty.
3. Help put their emotions on the sidelines
Offer an informed perspective to help clients tune out short-term election noise and navigate this season with confidence.
Harnessing historical election data
While presidential elections can be consequential in terms of the direction of public policy, they should not dictate clients’ investment decisions.
60%/40% portfolio returns by presidential political party
Past performance is no guarantee of future results. The returns of an index do not represent actual investor returns as one cannot invest directly in an index.
Sources: Vanguard calculations, based on data from Global Financial Data (GFD) as of December 31, 2023. The 60% GFD US-100 Index and 40% GFD US Bond Index is calculated by GFD. The GFD US-100 Index includes the top 25 companies from 1825 to 1850, the top 50 companies from 1850 to 1900, and the top 100 companies by capitalization from 1900 to the present. In January of each year, the largest companies in the United States are ranked by capitalization, and the largest companies are chosen to be part of the index for that year. The next year, a new list is created and chain-linked to the previous year’s index. The index is capitalization-weighted, and both price and return indexes are calculated. The GFD US Bond Index uses the U.S. government bond closest to a 10-year maturity without exceeding 10 years from 1786 until 1941 and the Federal Reserve’s 10-year constant maturity yield beginning in 1941. Each month, changes in the price of the underlying bond are calculated to determine any capital gain or loss. The index assumes a laddered portfolio that pays interest monthly.
Ways we can help
Try our Market Hindsight Tool to help put investing decisions into historical context
Use compelling charts to show clients the power of sticking to their investment plan during election season. The tool simulates market performance for historical market events, including previous elections, on your clients portfolios and demonstrates the value of staying invested.
Take these 3 steps to behavioral coaching success
Get our expert framework for guiding clients through moments of uncertainty. Elections are just one example of when your clients most need your help to separate emotions from their investment decisions.
Contact us.
Disclosures and footnotes
- All investing is subject to risk, including possible loss of principal. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
- Diversification does not ensure a profit or protect against a loss.