What Happens Next?
I know many of my friends and clients were surprised by the results of last night's election. Adding fuel to the fire, it didn't help that markets fell sharply as reactions to a Trump presidency spread across the world. The Dow was off over 800 points, more than a 5% decline, and futures trading on the S&P 500 temporarily halted.
The results of the election and its impact on financial markets will be discussed adnauseum in the coming days (well, probably weeks). The topic of incorrect polls is likely to come up, which is understandable because, in addition to the US election, polls for the Colombia-FARC peace deal and Brexit were wrong. Just remember that markets calmed down quickly after the Brexit vote rocked financial markets. In fact, it's now about 11:30AM EST and US markets have already stabilized - and are in positive territory.
I cannot predict what will happen over the next four years. No one can. In addition, it's questionable just how much any president can affect the economy. Markets will go up and down, but there's nothing you can do about it.
I coach my nine-year-old daughter's soccer team. The kids often complain the actions of the opposing team or calls made by the referee aren't fair. My response is always the same.
I ask them the following question: "Who can you control?"
They eventually respond with something along the lines of "No one" or, the answer I'm really looking for, "I can only control myself".
Don't worry about the financial markets because you can't control them. Instead, focus on the things you can control. I know that's easier said than done, especially if you're nearing retirement or already retired. What I do know is that my investment strategy hasn't changed since yesterday.