After months and months, it is finally here. Flip-flopping became an art. We have had laughs and tears, yet finally finalized our decision just a few days ago. Even with emotions running raw, we made a plan and know how to make sure our decision is seen by all.
Obviously, I am talking about Francis’ Halloween costume, what else could it be?
Halloween discussions start in the spring in the Zeches household. As you probably know, with a four-year-old, Halloween is a big deal. Over the months, he wanted to be Marshall from Paw Patrol, a firefighter or a monkey. Just last week he wanted to be a character from ‘The Sound of Music’. Finally, a few days ago he decided, he wanted to be Lightning McQueen.
While Halloween is going to look different this year, the excitement in his face to ‘pretend’ to be Lightning McQueen makes all the conversations worth it.
Do you have a favorite Halloween costume?
Looking at this past week, there has been downward pressure in the S&P 500 which has historically been seen before a presidential election. While the election can be one explanation it can also be COVID-19 or earnings. Using some information from our virtual meeting, I wanted to provide some context to the recent weakness in the market.
The graphic above shows historically, October is a strong month for stocks. Over the past 10 years, 20 years and since 1950, the S&P 500 has been positive in October. However, in election years, such as this year, the S&P 500 has been negative. Looking beyond October to November and December, even in election years, they have been positive. While past results are no guarantee of future results, history does say once we get past the election, the market looks to turn higher.
We realize emotions are running high. With everything going on politically, socially, and economically, it is understandable people feel anxious. Since we are constantly bombarded with information about the here and now, it can be difficult for us to try and zoom out and look at the big picture.
If we review the graphic above, there is always a reason to not invest and worry. For example, there was the JFK assassination, then we had Watergate, record unemployment, followed by the dot.com bubble, 9/11, the housing crisis and now COVID. By focusing only on presidential elections and events, one would miss the long-term growth of the market and economy. Our national GDP, or measure of all goods and services produced, was $543 billion in 1960 versus $2.1 trillion in 2019. During this same period, the S&P 500 with all dividends reinvested would have provided a return of approximately 31,425%. Our economy and markets have found a way to weather many different storms. It is our belief that they too shall weather this election, COVID-19 and whatever else is in store for us.
It is also important that we remember it is our personal situation which should dictate our investment choices. Historically, the most successful individuals are able get through these periods of unknown by continuing to look at their long-term goals and what they want to accomplish over their lifetimes. While we have an election in a few days and millions of people have already cast their ballots, we believe your personal goals and objectives can dictate what the future holds for you and your family. We are honored to help you try and accomplish all that is important to you.
As always, if you ever have any questions please do not hesitate to reach out to us.
Have a great weekend.
Chris Zeches, CFP®