Should I be worried about the upcoming U.S. election as a Canadian investor?

With the instability in the United States and a highly contentious election campaign underway, I get asked this question a lot: should I be worried about the upcoming U.S. election as a Canadian investor?

The answer is “yes, you should worry” for many reasons, but as a financial advisor, I would say that “no, you shouldn’t worry” when it comes to your investment plan.

Why “yes”?

Well, because what happens to our neighbours in the south always has an impact on us: their trade relations, their EPA regulations, even the way they are handling the pandemic. So yes, the choice of the 46^th President will no doubt be felt here at home.

And the stock market will also no doubt respond to that choice…

Why “no”?

Despite all of this, the answer is “no” when it comes to making decisions about changing your investment approach.

Though we may see market volatility once election results are known, that doesn’t mean we can predict what that volatility will be or that we should even try.

It’s never possible—or wise—to predict short-term changes in the market. Or to change your portfolio based on what you think might happen next week or next month.

If you do that now, you are operating on fear, not evidence. Or putting your faith in your crystal ball. Neither of those are reasonable approaches.

Here are a few facts to consider:

No matter who has occupied the White House over the past 85 years (ever since the Great Depression), the market has continued to trend upward. Whether a Democratic or Republican president, the result is the same: continued long-term growth. This is also true here in Canada, no matter who occupies 24 Sussex Drive.

This also means that no matter the national or even international events during that same period of time—violent conflicts, social upheaval, tragic episodes—the same is true.

However the market responds in the short-term, it continues to trend upward over time.

So why shouldn’t you be worried, despite possible short-term fluctuations? Well, your investment plan takes all of this into account! (or at least it should!)

What do I mean by that? You already have a plan that reflects your personal values, goals and life circumstances and is based on historical evidence and proven models. Your plan does not say, “But I will ditch those reasonable and careful considerations in the event of a major national or international incident.” Of course not.

It’s natural to feel anxious over what is happening in the United States right now. But as I always say, it’s unwise to make buy and sell decisions based on emotion.

Successful investors follow an approach based on evidence, analysis and a proven track record. That’s what my proprietary investment models are based on, and that’s why they work.

I can’t say what will happen to your portfolio over the next few weeks or months or even year. Neither can you or anyone else. But I can say that no matter who wins this election, we will all see continued growth in the market over time. That’s what evidence tells us.

So unless you have other reasons to change your investment plan—life circumstances, risk tolerance, or anything else—stay the course. That’s what’s best for your portfolio in these uncertain times.