GOLDEN VALLEY, Minn. — With the stock market already on alert due to the upcoming presidential election, President Trump's COVID-19 diagnosis did not do it any favors.
Following his announcement last week Dow futures fell more than 500 points overnight, and oil prices took a dive. The market has rebounded slightly since the initial announcement, but Wall Street traders are still apprehensive and are selling stocks.
Elijah Jovar with Great Waters Financial says that while we can't predict what will happen to the stock market in the next month before the election, we can look back at history to get an idea.
"The stock market ebbs and flows with a four-year election cycle," he said. "Historically, market performance is worse in the first half of a president’s term compared to the second half. Some believe that Democratic or Republican presidential wins have an impact on the markets. While studies show the Dow has gone up 9% annually when Democrats are in control and increased 6% annually during Republican administrations, from an investment standpoint, it’s not enough to make a drastic difference long term."
According to Jovar, while elections are something we keep our eye on, it’s not something that should be driving your investment decisions.
"Our emotions are heightened right now as we face so much uncertainty outside of the election, like the pandemic," Jovar said. "That can cause feelings like stress and panic. Remember— we can plan and prepare for fluctuations in the economy, but we can’t control it. However, we can control other factors, like how much debt we take on and what we put into our retirement savings."
One of the steps Jovar suggests is making a retirement plan, or a written income plan that includes Social Security strategies, healthcare, income planning and tax planning.
"A comprehensive plan will help you feel more secure as it outlines your retirement goals and the path you need to take to achieve them," he said. "Sit down with a financial professional who can go over all of your options, because each person is unique."