Summer is here! The weather, the stock market, and the political climate are all very hot. What do we do with all this heat?

Let’s talk about the markets first. The stock market did not take its usual summer break and has remained red hot through the second quarter. The US stock market (S&P 500) finished June up 15.3% year to date. The bond market has stayed relatively flat year to date after rallying 5.6% last year.

The financial markets continue to do well on signs of cooling inflation. While the battle with inflation is not over, the Federal Reserve has hinted at the possibility of a rate cut later this year and possibly more in 2025. For now, interest rates remain at their highest level in over 23 years.

What about politics? The polarization in this election has become dangerous and the political climate is worrisome in general. How does it affect the stock market? This country has had many scary times, but the performance of the economy and the stock market is generally not tied to politics. I include another article below sharing the significance of presidential elections on market cycles. Hint: there is no significance.

It is important to remember that the economy runs in cycles and there will be a pullback or maybe even a recession at some point. The problem is we never know how long each cycle lasts or what can turn the tide on the good times. We know we sound like a broken record, but this is why we create a good financial plan for you, diversify your investments, and invest according to your financial and psychological ability to take risks. We are here to help you stick with the plan no matter what the world throws our way. 

How Do Presidential Elections Affect the Stock Market?



On the evening of June 27^th, we saw one incumbent presidential candidate and one former president debate for the opportunity to serve as President of the United States for four more years. This isn’t the first battle between an incumbent and former president. The last time this occurred was in 1892, where former president Grover Cleveland defeated the incumbent president Benjamin Harrison to serve a second non-consecutive term.

Some of you that watched the debate may have been pleased with your party’s candidate, and some of you may be less enthused about the two men chosen to represent our country. My goal today is to not share political opinions but answer the question What impact will this have on my investment portfolio?

It is sadly normal for politicians to exacerbate some truths or even tell lies about the future of our country to be elected. Remember, if either nominee said their adversary would do a great job as president, they likely wouldn’t win. Therefore, we hear more of, “If my opponent wins, they will destroy our country.” This is a powerful statement with not a lot of evidence to back it.

Hearing these statements often presents an uneasy feeling for voters about the future of our country. Naturally, investors start to look for a connection between who wins the White House and which way stocks or the economy will go. However, history shows that long term investors have been rewarded regardless of who wins the presidential election.

From this graph you can tell there is not a clear connection between who wins the presidency and long-term performance of financial markets. Looking back at the past 16 election years, only three election years produced negative returns for financial markets. One of these was due to 2008 Great Financial Crisis.

It is still possible we see short term volatility leading up to the election as investors try to anticipate policy changes; however, this tends to be short lived. Factors such as the state of the economy, inflation, unemployment, interest rates, and corporate profits are much more likely to have a greater bearing on financial market performance.

One positive note is we have seen a 4-year presidential term from Trump and Biden. The financial markets have found a way to be resilient despite each president’s policies.

The world will continue to throw curveballs at us; however, resiliency and discipline are what will lead us to a brighter future.  Carolyn often says don’t use worry minutes about what you can’t control. Be smart, tune out the noise, and keep living your life. As for me, in addition to fishing, I have embarked on a new journey of becoming scuba certified. Diving under the sea is the best way to avoid the summer heat and get away from the crazy world for a while.

Stay safe, be kind to yourself and others, and know we’ll get through this.

LPP Happenings

The year is half over and time is flying.

As you know, we have exciting plans for the succession of Life Planning Partners, Inc. We will be adding three more people to our roster over the next two years and are happy to announce we just found the first of the three. We’ll share more when he starts in October. We all adore him and he has great financial planning experience.

Don’t worry! Carolyn believes in planning early, and she is not going anywhere any time soon.

Next in the news is an update on Camrie. As you may know, she grew up in Kansas, attended Kansas State, and moved to Jacksonville to work for us straight out of college. She is doing a great job and is very happy at Life Planning Partners. However, after three years in Jacksonville, she thinks this is not where she wants to grow old so she is doing an experiment. Camrie is moving to various cities five months at a time to experience different areas of the country and decide where she wants to put her roots. Her first stop is Vancouver, Canada! Since a third of our clients are long distance and we have good experience working remotely, we decided it would be a good experiment to have her working 100% remotely. We have fun plans to keep the camaraderie and make sure Camrie is in the loop on everything. Camrie and Carolyn are writing an article to share our experience with other financial planners that will be published in the late fall. We’ll share that with you when it comes out.

Thanks as always for working with us. We love the tribe we’ve created and are grateful for you being a part of what makes us special.