Five Election Year Clichés to Vote out of Office

Huh?

Why are you doing exactly what you disagree with philosophically? I just don’t get it.

Furthermore, every single article on this topic renders a different answer. This one says the market does well in an election year. Another says it tanks. Another one says the market spikes in an election year and then goes down the next two and then rises on the fourth year.

Get my kids’ tic tac toe board out and let’s make some patterns because that is how random this all is. Now do you see why people don’t trust this profession? Whenever somebody asks what seems like a simple question, they get a mish mosh of jibber jabber dressed up in fancy terms and rhetoric that not even the so-called thought leaders can agree upon.

This is utter lunacy. It’s a binary blasted question for goodness sake. Does the market go up or does it go down? It could be satisfied with a one word, response, people! But there’s no clear speaking in this profession, because there is no clear thinking. It is about whatever aligns best with the advisor making the most money at any given time given.

2. Stay the course despite market volatility during election times

Also phrased as, “We don’t time the market.”

And usually followed by:

However, our investment committee just so happened to readjust our tactical asset allocation to be long on cash and short to medium duration bonds while pairing back our allocation to domestic and international equities.

Did you ever think that one of the reasons advisors have such a hard time justifying your fees is that you all, and I mean almost every single one of you, have the same response to what happens when the market goes down?

“Do nothing.”

Did you ever think that this is not really a satisfying response?

Did you ever wonder why they keep asking you for a solution over and over again (which I know you all get irritated about). Because they don’t really believe the solution you have warrants the 1% fee they are paying you!

I could make a social media meme that says, “When the market goes down, do nothing,” and post it every time the market dips for your clients to see, and do your job for you. At least phrase it differently so you sound a little smarter. Maybe say something about how you do nothing until the portfolio drops 25% and then when the client threatens to leave or sue, you’ll consider selling down to cash. But you’ll use limit orders to make sure the downside is limited.

3. A diversified portfolio is your best defense to election year volatility

Also phrased as, “Don’t worry – you’re diversified!”

Sorry, I’m still worried.

Political events represent a systematic risk that by definition you can’t diversify out of a portfolio (until you use non-correlated assets which few do).

It is true that a diversified portfolio would solve the problem, but you’re misleading the client. Your portfolios don’t offer full downside protection, do they? Excuse me but the last time I checked I didn’t notice any of you shorting or hedging with put options!

Maybe I missed it.

4. By historical standards when X party is in power the market does better

Which party is “X” flip flops more than the political candidates themselves.

I hear as many arguments for one party as for the other party. I have come to believe that the person saying it is just making it up depending upon the political persuasion of the audience they are speaking to.

Given that neither candidate has the formula for the vaccine – only J&J does, or hopefully will – it doesn’t matter who wins. We’re all doomed either way until the pandemic is over, or at least so are us working parents who have four kids under seven years old and have to home school them while working.

Oh well, there’s one kid who writes in his homework pad that you take a bath with Dove soup (not soap), another one who thinks it’s goes 12,13, 15, and another one who wants to cross the London bridge to go from New York to New Jersey. I apologize to Mayor DiBlasio or whoever sentenced me to this punishment, but I really do not believe that I am ideal for this role. The worst part is you look stupid in front of your kids for not knowing as much as they do about some subjects like what is the difference between an alligator and a crocodile.

Tell me, advisors, will I survive? I mean, will I? Tweet your response to #prayforsarag. Just go to my website and copy and paste a selfie pic so they all know who I am.

5. October is one of the most volatile months in the year

Don’t even play yourself.

Does anybody remember March 16, 2020 when the market went down 12.93% in one day? You know, a bigger one day swing that Black Monday?

Volatility can’t be predicted, and that is precisely why it exists. If people knew when the market were going to go down and up, it would go down a lot less.

Sara’s upshot

Let’s get past the election clichés and get into some real marketing that will be more natural and true to your real personality. Join my membership and let’s work on it.

Sara Grillo, CFA, is a marketing consultant who helps investment management, financial planning, and RIA firms fight the tendency to scatter meaningless clichés on their prospects and bore them as a result. Prior to launching her own firm, she was a financial advisor.

Read more articles by Sara Grillo