Earlier this week, we emailed our clients to discuss how the election results should (or should not) affect their investment plans.  Figuring that others might appreciate our viewpoint, below is the entirety of that email.

Dear clients and friends,

Much has already been written about the results of the election.  We won’t add to the chorus by attempting to discuss the societal, geopolitical, or environmental impact of the election, but we want to address the one topic for which we are qualified: its impact on your investment plan.

In short, unless your career trajectory or financial goals have materially changed since the election (and please let us know if they have), its outcome should have no impact on your investment decisions.

History is full of surprising events, and the future will continue to surprise.  If your investment strategy requires you to forecast world events – or react to them – you are doomed to fail.  Your investment strategy does not.  Instead, yours is built on the only proven tenets of long-term investing: thoughtfully allocate according to your unique goals, diversify, keep costs low, and stay the course even when it feels painful to do so.  None of those principles have changed in the past few weeks, and adhering to them still gives you the best chance to succeed.

What does the new administration mean for the economy?  How will the markets react?  Ignore pundits willing to offer answers to those questions, because the reality, now and always, is that nobody knows.  What seems obvious today will rarely play out as expected.  (Just ask those who shorted stock futures on election night – the S&P 500 is up 4% since November 8th.)  Short-term returns are impossible to forecast, and long-term returns are driven by factors that have little to do with politics: namely innovation and capitalism, which are not now and never have been at risk.  So, as always, we remain agnostic in the short-term and optimistic in the long-term.

You may be thinking, “I understand all of that, but this period just feels different.”  From an investment perspective, “this time is different” are dangerous words.  Straying from the fundamental principles of investing even during the most uncertain geopolitical moments (think World War II, the Cold War, or September 11th) has never been a winning bet.  Now would be an unwise time to do so.

So we will continue to stay the course with our financial plans and help you to do the same.  In the meantime, we will focus on all of the things we can control: diligently saving, optimizing our portfolios while minimizing costs and taxes, and ensuring that we are still on track to achieve our goals.

Regards,

Andrew, Pat & Tim