Helping financial services clients sort through political insights and post-election noise
JAN. 04, 2021
Many independent agencies offer financial services to clients—including in some cases investment products. As your financial services team works with clients it’s important to remember they are investors first and foremost.
Investors have a lot on their minds these days, from trade negotiations, to geopolitical tensions, and one of the tightest U.S. presidential elections in history. Political insights and news can add noise to investors’ desire for clarity and understanding.
Investor perceptions of risk and reward influence the decisions they make in their portfolios—and political leanings can distort these perceptions. Politically-inclined investors tend to see the markets as less risky and more attractive when their preferred party is in power. In contrast, those whose party is out of power are likely to feel more pessimistic and see greater risk in the markets.
In this age of information abundance, how do investors use the news to determine how political factors affect a business or market? Tune out the noise if you’re looking for prudent guidance and actionable insights. Then, pay attention to the fundamentals, which have a bigger influence on market value than the fickle winds of the political climate.