2016 3rd Quarter Report – The US Election

Trump vs ClintonDespite the recent volatility, returns were very positive for this quarter. Almost every major asset class is in positive territory and economic fundamentals are improving in most of the major world economies. After a number of quarters where the S&P 500 had outperformed other indices, returns on diversified portfolios this year have restored the age-old mantra of diversification being one of the most prudent strategies for investments. As we approach November, the question on everyone’s mind is the upcoming US election. Lately, every time I have a conversation, the topic comes up and not once has someone expressed any satisfaction with the Presidential options. The term, “lesser of two evils” is repeatedly mentioned, which makes me ask “How did we get here”? I read an great article on the US election I’d like to share that offers an interesting answer to this question:

https://www.theamericanconservative.com/articles/how-did-we-end-up-with-such-unpopular-candidates/

I have also included a great article by Jerry Webman of Oppenheimer Funds and thought it summed up the election options so thoroughly that I decided to include it in this quarterly report. It clears up a number of misconceptions, such as the notion that the incoming President dictates stock market returns. In truth, the stock market does not favor either candidate and doesn’t care if the public is happy with the current President, which may be a good thing based on the previous article I mentioned! Also, consumers and businesses have a far greater impact on the economy than the government. Historically, the state of the economy has influenced who the next President will be, not the other way around. That said, it is true that important issues would be affected by the outcome of the US election, including healthcare, entitlement programs, taxes, defense spending and the Dodd-Frank law.

Warm regards,

Olivia A. Mussett, CFP®

President