Political expert Dave Price, center, recently moderated a discussion about investments with Gilbert & Cook senior investment strategist Kate Gudgel and financial adviser Todd Henningsen. (Photo: Gilbert & Cook)
By Steve Dinnen
It’s the middle of 2024: time again to check on your investment portfolio and what lies ahead. At this politically fraught moment, the upcoming presidential election seems to be giving some guidance, however muddled it may be.
You’ve likely done well the past few years and so far in 2024. If your portfolio followed the S&P 500 Index, it would have risen 18.4% so far this year, and 24.16% year over year. The NASDAQ 500 rose 24.6% year to date and 29.16% over the last 12 months. Those increases left the Dow Jones Industrial Average in the dust: It’s risen just 6% year to date and 15.6% for the past 12 months. Those are pretty good numbers, the Dow aside, and with any luck, your portfolio has kept up with these benchmarks.
The economy remains strong. Everyone who wants a job appears to have one. The stock market is setting record highs, and the consumer price index fell ever so slightly in June. In remarks this week, Federal Reserve member Chris Wallace, a voting member of the Federal Open Market Committee, played sweet music for the interest rate-sensitive ears of Wall Street when he said, “I do believe we are getting closer to the time when a cut in the policy rate is warranted.”
All of this and more are reason enough for Kate Gudgel, senior investment strategist at the West Des Moines financial advisory firm Gilbert & Cook, to counsel staying the course with investments. Markets rise and markets fall, sometimes dramatically, but she and most other investment professionals advise staying in the market for the long term rather than trying to time transactions with current events.
“The stock market does not live or die on who has control of the White House or Congress,” Gudgel said at a midyear review event held by Gilbert & Cook.
Looking at records dating to 1926, the stock market as a whole actually performs better in presidential election years than on average, up 11.6% versus 10.3%. (I’m not picking sides here, but historical figures show the market tends to fare better when a Democrat lives in the White House.)
On the horizon, some investment outlooks or tax changes may well occur after the November election. Joe Biden has talked about boosting taxes for people earning more than $400,000 a year and has teased about tinkering with capital gains taxes, which could hurt investors. For his part, Donald Trump has spoken about higher Chinese tariffs. And either president will get an opportunity to revisit the Tax Cut and Jobs Act, Trump’s 2017 tax overhaul, which includes provisions that will expire at the end of 2025.
