Nov 5, 2020
While we adhere to strict editorial guidelines, partners on this page may provide us earnings.
Take a cue from Warren Buffett: Don’t get too anxious over the presidential election.
The billionaire businessman says elections — even very close or contested ones — are nothing for investors to worry about.
Advertisement
That’s because, as he sees it, "This country really, really works."
Thanks for subscribing!
Read the best of Moneywise in 5 minutes or less.
By signing up, you accept Moneywise Terms of Use, Subscription Agreement, and Privacy Policy.
Here’s how the investing legend views the political divide, plus his advice on how to keep your finances healthy no matter how the post-election period plays out.
Buffett: America 'moves ahead'
Biden? Trump? Buffett might say: Who cares?
The Oracle of Omaha (Buffett’s Nebraska hometown) says the U.S. economy thrives no matter who sits in the Oval Office.
“Multiple times in my life, people have felt the country was more divided than ever,” he said in 2018, at his Berkshire Hathaway company’s annual shareholders meeting. “After every election you’ll have people feeling the world is coming to an end and, you know, ‘How could this happen?’”
Buffett, who’s 90, has lived under 15 American presidents and says he’s seen a great deal over the years. And yet, he says by one measure the U.S. is now six times more prosperous than it was when he was born.
The lesson? “Through it all, you know, America — in fits and starts — but America really, really moves ahead,” he says.
Must Read
- The ultra-rich use these 5 real estate strategies to build wealth while they sleep — you can start with just $100
- Here’s the average income of Americans by age in 2026. Are you keeping up or falling behind?
- Insurance companies profit most from drivers who auto-renew without shopping around. Comparing 100+ quotes takes 2 minutes and costs nothing
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
A time to just hold on
Advertisement
Buffett famously preaches the gospel of “buy and hold.” In his case, it might be “buy and hold and hold.”
The idea is to stick with your investments for the long haul and don’t be distracted by market ups and downs, like any volatility that might occur as the vote is sorted out.
Why is that so important? Buffett told his shareholders in 2018 that if someone had invested $10,000 in the S&P 500 stocks in 1942, that 10 grand would have grown to an astounding $51 million.
If you’re just venturing into stocks, maybe by using a popular, low-cost stock trading app, be determined to hold on tight whenever the stock market turns shaky.
An alternate way to invest, which will help you stay on track, is by using a robo-advisor, or automated investing service. It will build a diversified portfolio for you and then automatically adjust your holdings to protect you whenever things turn stormy on Wall Street.
What’s the market likely to do?
Advertisement
Stocks initially greeted the up-in-the-air election results with a rally, on hopes that the government would remain divided, with neither political party in full control.
In a report just days ahead of the vote, JPMorgan said any election outcome would be either neutral or positive for the financial markets, and forecast that the S&P 500 would reach new highs by the end of the year regardless of the final vote.
You need only to look back at the 2000 presidential race to see how markets might behave amid election turmoil. A recount in Florida dragged on for weeks, and it wasn’t until December that the U.S. Supreme Court named George W. Bush the victor over Al Gore. Stocks did go through some drops while the race remained unsettled.
But a gauge of market volatility showed that it peaked before the election took place, and didn’t become an issue again for quite a while later — in response to the dot-com stock crash.
So don’t let yourself get worked up over whether the U.S. political system can handle the current drama. “It works, you know,” Buffett told his shareholders in 2018.
Need some additional reassurance? You can get expert financial planning advice online — and it’s more affordable than you think. Don’t let election anxiety get in the way of your retirement plan.
You May Also Like
- JP Morgan sees gold hitting $6,000/oz before 2027 — and a Gold IRA lets you hold the physical metal while deferring the tax bill. Get your free guide from Priority Gold
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAP
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Millionaires under 43 are reshaping investing — just 25% of their portfolios are in stocks. Here’s where their money is going
Ethan Rotberg was formerly a staff reporter at MoneyWise. His background includes nearly 15 years as a writer, editor, designer and communications professional. He loves storytelling, from feature writing to narrative podcasts. His work has appeared in the Toronto Star, CPA Canada and Metro, among others.
Life • Jan 04
Offensive Yards: The worst NFL stadiums, ranked
Mortgages • Jun 14
