It seems that year after year, markets are becoming more concerned with the ongoing dialogue (or drama) coming out of Capitol Hill. Our decades of experience tell us that while it is important to understand and follow legislative evolvement, making significant portfolio adjustments based on political rhetoric can create poor investment outcomes. At present we are once again witnessing brinkmanship in D.C. around the budget, the debt ceiling, and spending on legislation related to infrastructure. Regardless of one's view on each, neither party wants to create a systemic financial calamity created by their inaction. Markets, however, cannot seem to grasp this concept, in the short term, and we have seen volatility swing both up and down based on daily news leaks. In recent years we have heard or read how trade policy in previous administrations, Brexit votes that would see the UK exit the EU, and one Presidential candidate over another that were all going to lead to disastrous market conditions. While this "noise" certainly created some short term movements, it had little bearing on market performance much beyond their headlines. We recommend staying focused on areas that are more likely to have longer term impacts for markets. Economic activity, earnings, and monetary policy. We recognize that politics has somehow evolved into a contact sport over the last 20 years and while we acknowledge the "entertainment" value, we absolutely discourage it from leading to rash portfolio decisions.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Matthew Spradlin and not necessarily those of Raymond James.