Presidential Election Alert and What to Do Now
Donald Trump won the presidency and the stock market reacted by selling off in early trading. Quickly, however, traders moved money around from this company to that company, one industry to another. The best long-term investors stay the course.
Surprises like this election are opportunities to move money from people who are afraid to own stocks to long-term investors like us, who have the courage to remember the great truths of investing.
One of these undying truths is that capital seeks the highest return. While it could be possible that one can bet on a particular sector, or company, doing better than another, based on political results, our experience has been that you don't need to see the future to make money on your investments. Instead, investing in a small number of the best companies in America and the world, especially when they are a bargain, and holding onto them historically leads to long-term success, especially when other investors see how well they are doing, and invest along with us.
Another truth is that it is better to be an owner than a loaner. Stocks pay more over time than bonds; owning companies pays more than lending money to companies or the government. How strange, today, that I need to say this when, for the first time in history, some investments in many areas of the world pay negative interest rates.
And, among many other truths, this one persists: The government is broken. Stocks move up and down. And the news is scary.
So if you have money on the sidelines, as some of you do, consider talking with your advisor and making plans to invest. When others are fearful, often our investment managers make their best decisions; they find the great bargains. Many of the investment managers we trust have kept some money on the sidelines--kept their powder dry, so to speak. I imagine they are working hard, right now, to take advantage of any opportunities the emotions of this presidential election create.
As our investment managers create materials and updates about the election, informing us about their decisions and opportunities, we will keep you updated here, and on our website.
Links to stories in the news: