The market doesn’t care who is in power


The betting on who will win the next general election is odds on in Labour’s favour and I fully understand how tempting it is to wonder how the markets will react to this. (Quick answer: the market won’t react on Election Day as the expectation of them winning is already reflected in today’s values).

The betting on the American election (at least we all know when that one is) is less decided, and again, what will the markets think of Biden continuing or a Trump return?

Will bonds do better under Labour? Will interest rates fall? Will Trump withdraw from Nato? What will Trump do about Ukraine and Gaza? And on and on and on we could go…

Thankfully, the collective wisdom of the markets does all the heavy lifting for us all and frankly, they don’t mind who is in office as there are far bigger forces at work in the global economy. Look at the two charts below and think back to the “focus on what you can control” sketch on our homepage.

Investors should focus on how much they spend, save and invest, how much risk they take with their investments and their own behaviour and decision making. Acknowledge you have no influence over market returns, government policy or central banks changing interest rates. Then get on with enjoying life! 😀