Anxiety about the election was already rising before a gunman at a campaign rally this past weekend tried to kill former President Donald Trump. As voters have been through the COVID-19 pandemic, the wild swings in the stock market that followed, and sharply rising consumer prices and interest rates, the shooting was just the latest event that made them feel uneasy.
The American Psychiatric Association did a poll in April, and 73% of people said they were worried about the election. In the same way, Janus Henderson’s survey of investors
78% of wealthy and high-net-worth investors were worried about the election last autumn (JHG 2.29%).
Experts told MarketWatch that worry and stress should not make you change how you handle your money.
Ben Rizzuto, a wealth strategist at Janus Henderson, said, “The events of the past weekend will probably make people more worried, angry, and nervous about the election.” “Everyone should remind themselves that making financial decisions based on emotions is usually a bad idea and should not be done at the wrong time.”
People should try to stick to their spending, saving, and investing plans as much as possible, said Catie Hogan, who used to be a financial planner and is now the head of curriculum at the Parthean app for financial coaching.
They said, “There’s a lot to worry about, but we can control what we do with our money today.” When it comes to money, she told MarketWatch, panicking is “not a winning strategy.” Hogan said she tells her clients to “choose to be hopeful.” Make the choice to be positive. Many of these things happen over and over again.
Even though the assassination attempt shocked everyone, the markets responded well as the chances of Trump winning the 2024 election rose. A poll done before the shooting for the Financial Times and the University of Michigan’s Ross School of Business found that more people think they will be better off financially under Trump than under President Joe Biden.
Trump named Ohio Sen. J.D. Vance as his running mate on Monday afternoon.
Business owner David Haas told MarketWatch that he tells his clients “to completely ignore the political situation when it comes to money and finances” as more information about the race comes out. There is no way to know ahead of time how politics will impact the markets or the economy… An attempt on a politician’s life is terrible, but market effects only last for a short time.
But staying the course can be hard because people’s financial decisions are often based on their feelings. A psychology professor at California State University Long Beach named Max Alberhasky wrote on Psychology Today that fear can make people not want to invest or take their money out of the market. On the other hand, anxiety and depression can make it impossible to make choices, which can mean that you put off investing or forget to pay off your debts.
“It is hard to think about the long term right now because the news is so intense, both politically and financially,” Alberhasky told MarketWatch. “Political chaos makes us all feel like we’re living in a movie, but every day the stock market sets a new record.” Staying true to your long-term plans is the best way to deal with all of this chaos.
People are also less likely to spend when they are uncertain. A recent survey by Deloitte of parents found that 37% of them are being careful with household spending because they are worried about the upcoming election. “Remember that companies are focused on growing their business and making a profit, no matter what is going on in Washington or the world,” said Michael Davis, a financial advisor with Legs Financial. This may worry investors.
“It’s incredibly important to make sure you’ve done things that help increase financial confidence and decrease negative stress” during times of anxiety, said Rizzuto of Janus Henderson, so that people don’t make decisions based on their feelings. “Investors can feel less stressed during election season and better reach their long-term goals by focussing on what they can control, such as the money habits they’ve formed, the goals they’ve set, and the plan they fit into.”
People who are trying to deal with their feelings about the uncertain future should read these money tips:
- Don’t forget your money goals
Think about your long-term money goals and write them down. “That clarity leads to great financial confidence,” Rizzuto said, citing research that shows 73% of people who say they are clear about their financial goals also say they are less stressed.
- Follow your money plan
There is a schedule in a financial plan that shows the steps that need to be taken to reach these goals. “Reviewing your financial plan helps us remember our long-term goals during times of greater uncertainty.” “This takes our minds off of the short-term emotional present and puts them on something calmer and more fixed on the future,” Rizzuto said.
- Add more money to your emergency fund
And Haas from Cereus Financial agreed that investors who are worried should keep extra cash on hand. Having some extra cash won’t hurt you, and it might even help you sleep better at night, he said. “You can get high-yield savings accounts that yield 5% or more.”
Parthean’s Hogan said that people who are “very nervous about what’s going on in today’s society” can increase their emergency savings to cover a year or even a year and a half of uncertainty, instead of just the three to six months that is usually suggested.
Rizzuto also said that people can stick to their long-term plan without making big changes if they have enough money in an emergency fund to get them through a possible market downturn.
