CHARLOTTE, N.C. — Historically, investments in the market can be strange in the time leading into a general election.
Mark Henry, CEO and founder of Charlotte-based Alloy Wealth Management, explained many times that emotions are the driving force behind a lot of people's decisions.
"History shows us that markets really don't change that much overall, just a lot of nervousness," Henry said. "A lot of this can be caused by people. Election is gonna go one way or the other. So they sell, or they buy, causing volatility."
He said markets typically try to get ahead of big events like a presidential election.
"They're taking advantage of what they believe is gonna happen with an expectation of what that would do long term," Henry explained. "Now, if those outcomes came to fruition of what the markets believe, then you would expect it after the markets for them to continue on whichever way they were going, up or down. However, what if they were wrong? Oh my gosh, then you could see a completely different outcome. And again, that comes with this high volatility that we see before and after elections many times. But then guess what happens, markets adjust and they smooth out."
He said long-term investors shouldn't worry too much.
"So, if you're a 30-year-old building your net worth, the message should be status quo," Henry said. "Keep funding your 401(k)s. Keep putting money in the market. And don't worry about the election."
However, if you are nearing retirement, Henry suggested something different.
"You better start getting those accounts into very diverse locations that also are inside and outside of Wall Street," Henry outlined. "You don't put all your assets in one basket. And so you get a very diverse account so that when markets do things you may not care for, it doesn't affect you as much."
Regardless of age, people should make a plan.
Henry said that's where certified financial planners come in. The financial expert encouraged investors to do their research and find one they trust to create a plan. From there, they should look at the risk then adjust it for where you're at in life.
Contact Jane Monreal at jmonreal@wcnc.com and follow her on Facebook, X and Instagram.