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Published on:

29th Nov 2024

Fix it Friday Ep. 2 - Never Mix Politics and Investing

Welcome to Fix It Fridays on the Crazy Wealthy Podcast with Jonathan Blau, CEO of Fusion Family Wealth. In these quick, bi-weekly episodes, Jonathan unpacks common financial missteps and the behavioral biases that often trip up even the savviest investors. Today’s episode dives into the critical lesson of separating politics from investing. With insights from historical data and key moments in U.S. political history, Jonathan highlights why emotional reactions to elections shouldn't influence your financial decisions. Stay tuned for valuable takeaways, including a perspective from Warren Buffet on maintaining a steady investment strategy.

IN THIS EPISODE:

  • [:57] Don’t mix politics and investing
  • [3:01] History of both Bush administrations
  • [4:46] History of bitter partisan elections
  • [5:06] 1948 Election 
  • [6:49] Closing Statements YouTube video of Warren Buffet

KEY TAKEAWAYS:

  • Mixing politics and investing is a mistake. Historically, long-term market returns have been consistent regardless of political party, averaging 10.7% under Democratic regimes and 10.5% under Republican ones.
  • In 20 tracked decades, only one—2000 to 2009 under George W. Bush—saw flat market returns, driven by significant events like the dot-com bubble burst, 9/11, and the global financial crisis, rather than political affiliation. Interestingly, the best-performing decade, 1988 to 1997 under George H.W. Bush, delivered 18% annual returns, with stocks increasing fivefold.
  • History shows that market performance over the next decade will likely be substantial, regardless of election outcomes. While this election has been highly partisan, bitter political divides are nothing new—dating back to 1803 when Vice President Aaron Burr fatally dueled Treasury Secretary Alexander Hamilton.

RESOURCE LINKS 

Fusion Family Wealth - Website

Jonathan Blau - LinkedIn

Warren Buffet - YouTube

Please Note: No individual has been provided nor promised any direct or indirect economic benefit for sharing Fusion podcasts/articles/opinions. No post should be construed as any assurance that a reader will find the podcast/article/opinion beneficial.

Please click below for important disclosure information.

https://www.fusionfamilywealth.com/disclosures

ABOUT THE HOST: 

Jonathan is the President and CEO of Fusion Family Wealth, a firm he founded in 2013 that emphasizes behavioral finance to help clients make rational financial decisions in uncertain times. Known for his clear and engaging approach, Jonathan is a sought-after speaker in wealth management and investing. His background includes senior roles in tax and estate planning at Arthur Andersen, and he holds a BS in Finance, an MS in Taxation, and an MBA in Accounting. Based on Long Island with his family, Jonathan is active in the local business community and supports causes like the Middle Market Alliance and Sunrise Day Camp. He enjoys boating in his spare time.

Transcript
Disclaimer: [:

A copy of Fusion's current written disclosure brochure discussing our advisory services and fees is available upon request or at www. fusionfamilywealth. com.

Voice Over: Welcome to the crazy wealthy podcast with your host, Jonathan Blau, whether you're just starting out or are an experienced investor, join Jonathan as he seeks to illuminate and demystify the complexities of making consistently rational financial decisions under conditions of uncertainty. He'll chat with professionals from the advice world, entrepreneurs, executives, and investors.

e back to Fix It Friday, the [:

elections, politics, and how those ought to be factored in to our investment portfolios. So let's start by saying in all of my experience in the industry and everything I've read historically about past elections and political environments, it's a very bad idea to mix politics and investing. And so, One of the things that that I'll do is bring, bring everybody through a a history of past elections, just to, just to take a look at since 1936, what's happened in the aftermath of, of elections.

And by the way, since:

What I mean by that is of the 23 elections, there are 20 of the elections where there are 10 year track records that we can look at for the return of the standard of force 500 index for the return of stocks broadly in the U. S. And Under the Democratic regimes, we saw returns that averaged 10.

that [:

And that was at 10 years with, with . Yeah. The younger George Bush was the president, and that was from 2000 to 2009, and that had really nothing to do with the president's political affiliation more than the fact that that decade from 2000 to 2009. Saw the dot com bubble burst, followed by the 9 11 terrorist attacks, and then four or so years later, followed by the worst financial crisis in modern times the, the, the global credit crisis.

riod was, was the period from:

So, the worst 10 years and the best 10 years. were attributable to [00:04:00] the father, the son of Bush political dynasty. So that's just an interesting tidbit. So what's also interesting is that what I take away from it, based on all of history, the 10 year periods following an election year, 95 percent have been positive and have averaged.

Over 10 and a half percent, 10 and a half to plus percent a year. So based on that, it wouldn't be unreasonable to expect that the next 10 years ought to be good, regardless of whether or not one agrees with who's been elected president. And so the interesting thing is this has probably been one of the most bitterly partisan elections in history.

s to elections. Dates back to:

And a fellow named H. L. Mengen, who's known as the Sage of Baltimore, he was a journalist who, who wrote for the Baltimore Sun, and he said, this is it. The end of everything, when Truman was elected, there were fears that he, that Truman was a communist, and, and many things were going on then, including, we had boots on the ground entering into Korea we had the Soviet Union acquiring the A bomb, and, and we had fears of of, of investigations regarding it.

ould have done is they would [:

The markets went up by half 50% between 1948 and January 52 when Eisenhower was elected. And in fact, when you included dividends went up almost a hundred percent. during that period. So, so mixing politics and investing has, has generally never been a a good idea. One of the things I'm going to leave you with is a video at the end of this podcast that you'll be able to see in that notes section, where one of the wisest investors and most successful whoever lives, who fortunately is still with us, Warren Buffett talks about his experience.

Wealthy in General, and the [:

on crazywealthypodcast. com. You can go to fusionfamilywealth. com, our website, and you can also listen on your favorite venues, everything from Apple to Spotify to iHeartRadio and, and all of the popular venues. Thank everybody so much for tuning in and we look forward to having you join us. On the next episode,

Voice Over: thank you for tuning into another episode of the crazy wealthy podcast for more insights, resources, and to sign up for our newsletter, visit crazy wealthy podcast. com until then stay crazy. Wealthy.

umed that future performance [:

Neither Fusion's investment advisor registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if Fusion is engaged or continues to be engaged to provide investment advisory services. Fusion is neither a law firm nor accounting firm, and no portion of its services should be construed as legal or accounting advice.

No portion of the video content should be construed by a client or prospective client as a guarantee that he or she will experience a certain level of results, If Fusion is engaged or continues to be engaged to provide investment advisory services, a copy of Fusion's current written disclosure brochure discussing our advisory services and fees is available upon request or www.

fusionfamilywealth. com.

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About the Podcast

Crazy Wealthy Podcast
Welcome to The Crazy Wealthy Podcast, a resource for understanding and mastering the biases that often lead to short-term personal finance, investing, budgeting and savings decisions and strategies that are counter to our best interests over the long-term. Whether you are a professional, entrepreneur, young adult, retiree, or family looking to protect your current wealth and secure a financially stable future, this podcast provides the latest insights into investor behavior in the context of current trends and current events that may influence investor perceptions of the financial markets and interfere with the ability to make rational wealth planning decisions.


Hosted by financial and investor behavior specialist Jonathan Blau, the podcast simplifies the complexities of wealth management and seeks to offer practical, actionable advice listeners can implement immediately. Each episode covers topics ranging from money management and investor behavior fundamentals to prudent investment strategies, equipping listeners with the knowledge and tools needed to build, grow, protect and be comfortable with their wealth.


The podcast covers essential financial topics and behaviors that may help listeners increase the odds of achieving their financial goals. It also breaks down complex financial news and market updates, keeping listeners informed and empowered and helping them to learn not to reflect any fears or euphoria incited by the news by altering their financial plans or portfolios in response. Whether building wealth early in a career, navigating the financial challenges of entrepreneurship, or preparing for a comfortable retirement and family legacy, the thought-provoking insights offered guide listeners every step of the way.


Designed to be relatable and practical, The Crazy Wealthy Podcast caters to all financial experience levels. The podcast presents financial concepts clearly and concisely, endeavouring to enable listeners to take actionable steps immediately. It seeks to provide the tools and knowledge necessary for informed financial decisions that lead to empowerment and minimize the negative influence that human biases and emotions often have on financial decisions.


Listeners can gain straightforward financial and behavioral investment counseling insights, learn how to develop a personal financial plan, discover wealth-building strategies, and stay current with the latest financial news and trends, especially in the context of behavioral finance. In depth interviews with top professionals in the financial and behavioral finance industry, current investors and others provide valuable perspectives and proven tactics for financial success.


Whether planning for retirement, managing family finances, or growing a business, The Crazy Wealthy Podcast can serve as a trusted resource for achieving financial freedom. Subscribe today and take the first step toward a more secure financial future!


About the Host

Jonathan is the President and CEO of Fusion Family Wealth, a financial advisory firm he
founded in November 2013. Behavioral finance is an important aspect of his business and he brings a thought-provoking perspective and clarity to his work with clients by seeking to teach them how to consistently make rational money decisions under conditions of uncertainty.

Jonathan is a sought-after speaker for podcasts and media publications, bringing a fresh wealth management and investing perspective shaped by insights from the world of behavioral finance.

His insights and clarity on working with clients make him a distinguished voice in the field, illuminating and demystifying the complexities of financial decision making.
Jonathan honed his planning and technical skills during his tenure as a senior tax and estate planning specialist in the Tax and Family Wealth Planning division of Arthur Andersen from 1992 to 1996. In his free time Jonathan enjoys boating.


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