Often, Alex Cabot and Ed Lambert at Birch Run Financial are asked about how the political environment can affect investments.  Today, we take a deep, non-partisan dive into that very question.

First, Ed takes the 30,000 view.  On average, it doesn't matter which party is in charge in Washington - Democrat or Republican.  There is a small uptick in returns when the government is divided, as opposed to one party controlling Congress and the White House. 

What does come into play though, is confirmation bias.   Individual investors often minimize downturns when their party is in power, yet blame the opposite party when markets are down on their watch.  Bottom line, the market has been on the pace of a 12-4 NFL team.  (And yes, this point led to some heated Patriots-Eagles trash talk.)

Next, Alex breaks down the specific data when it comes to political parties. We look at every Administration since 1981, as well as rolling 48 and 96 month averages.   This information proves that, once again, it's not timing the market, but rather time in the market that counts.

Finally, with all the talk about media bias and political bias,  Alex provides some historical context.  Our current climate is not without precedent.

Alex and Ed have a new book out, Mastering the Money Mind: A New Way of Thinking About Personal Finance.  You can contact them below for a copy or find it on Amazon here: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal-ebook/dp/B09YB9J315

Birch Run Website: www.birchrunfinancial.com

Birch Run Financial email: [email protected]

Birch Run Financial Phone Number: (484) 395-2190

You can always email Alex and Ed at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://www.birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

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