While war escalates in the Middle East, a political battle is also heating up in Washington. As of this writing, there is still no House speaker in Congress after Kevin McCarthy's exit and Steve Scalise's withdrawal over the past two weeks. While several Republican and House votes are scheduled to attempt to resolve this leadership vacuum, more political hurdles are on the horizon. This only complicates the market and economic environment for investors already navigating higher interest rates, Fed uncertainty, stock market volatility, and more. What can investors do to keep politics in perspective as the situation in Washington evolves?
We discuss in this episode of The Wealth Effect Podcast:
📈 The Federal Debt to GDP
💸 Federal Govt. Interest Payments
📊 Stock Market Returns and Political Parties
Matt Faubion, CFP®
Founder - Wealth Manager
Show notes and charts:
The size of the federal debt continues to worry many investors
Interest payments on the federal debt are expected to rise past historic peaks
The market can perform regardless of Washington leadership
While there may be historical differences in market performance, the average year is significantly positive regardless of the types of leadership combinations across political parties. Further, from a statistical standpoint, more samples are needed to make statistically significant inferences from the data. And lastly, many other factors impacted these performance periods that had little to do with politics
The Bottom Line: There are many ways in which politics matter, but investors should maintain perspective when it comes to their investment decisions. It will be more important than ever not to be distracted by Washington headlines in the coming months.
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