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Millions of investors are understandably consumed by today's presidential election. They're trying to figure out which sectors and companies will benefit most and how to protect their money...
...if Clinton wins
...if Trump wins
Unfortunately, they're making a huge and potentially very expensive mistake, despite the best intentions and despite their well-founded desire to be proactive.
Politicizing your portfolio is the last thing you want to do.
With one exception.
Most Patterns You See Aren't Relevant to the Decision You're About to Make
If you're one of millions of investors and you're worried sick about today's outcome, you're not alone. Between the political angst and markets that fell nine straight sessions in a row, there's just not a lot to work with.
But there could be.
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What matters most right now when it comes to your money is how you think about the election - not what you think about the election.
This is where most investors who try to anticipate what's going to happen next get into serious trouble.
Take President Obama's campaign in 2008.
If you recall, he wanted to put gun makers out of business, turn healthcare into a national asset, and power our nation using all natural energy. His campaign motto was twofold: "Hope" and "Change we can believe in."
Investors who "voted" with their money back then - like many folks are trying to do now - got taken to the proverbial cleaners. Many damaged their portfolios to the point where they'll never recover.
More guns have been sold under President Obama's watch than any other administration. In fact, his election proved to be a bigger catalyst for gun sales than even the horrific events of 9/11. Sturm Ruger & Co. (NYSE: RGR) and Smith & Wesson Holding Corp. (Nasdaq: SWHC) are up 1,018% and 843% since the day he was sworn in.
Medical care has gotten prohibitively more expensive instead of cheaper. The iShares U.S. Medical Devices ETF (NYSE Arca: IHI) has returned 238% in contrast to the Dow's 124%, despite the fact that one of Obamacare's key features was a medical device tax and many analysts had investors believing that national healthcare was going to crater the industry.
And, last but not least, clean energy stocks, which were widely expected to scream higher on President Obama's watch have, in fact, fallen by as much as 75% over the same time frame.
Ergo... politicizing your portfolio almost never works out. The only guarantee that comes from trying to overcome past choices is depriving yourself of future returns.
Behavioral scientists like Dr. Meir Statman of Santa Clara University suggest that this is because investors cannot separate good choices that simply turned out badly for whatever reason from stupid decisions that they never should have made in the first place.
Which brings me to the one "vote" you actually do want to make right now.
The Most Profitable "Vote" You Can Cast Is the One That Will Actually Make You Money
About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.