Come November 3rd, the most important political event in the world will take place — the US elections. Everyone is wondering who is going to emerge as the winner, Donald Trump or Joe Biden?
At Rise, we are pondering about that too but more importantly about what this election means for your investments and how it affects your stocks portfolio.
The U.S. presidential election can have a major impact on policy, laws and foreign relations. But how do presidential elections affect the market? And how does that affect you and your investment portfolio?
We know that the next few weeks are going to be very volatile but the investments we select for Rise are chosen because they have the ability to perform well and ride out volatile markets, even if their value might fluctuate in the short term.
Your investments in Rise are similar to ownership stakes in different businesses. If you own a strong, profitable and growing business, managed by competent hands and operating in a large market, you will not sell your business because of approaching elections, would you? To illustrate this point, take our positions in Visa and Mastercard, two of the strongest businesses around card payments and e-commerce. Profits have never been stronger, yet thanks to short term market volatility, they are down. So rather than panic and sell, we buy. That way, when the market inevitably recovers, the value of your investments would be even higher.
To quote a market veteran, Peter Bernstein, who lived through two market crashes, “time in the market is more important than timing the market.” Basically, as long as you are holding high-quality investments, then your best move is to focus on the long term and don’t try to time the market.
So how are we responding to the election volatility? We are keeping our eyes on the best investments on the market, and when their prices go down, we buy more of them. In the meantime, we are also increasing our market hedges to reduce the volatility in your portfolio. So when all this has passed, your portfolio will get stronger. You have nothing to worry about. You’re using Rise, so you know your investments are in the best hands.
The Rise Team