Think Local, Act Local: Do Not Bet Against America
The election is finally over. Every election cycle, many Americans find themselves on an emotional rollercoaster. We cast our votes, participating in the democratic process outlined in our great Constitution, but often, we lose control over what happens next. It took me about 20 years after I began voting at age 18 to realize that I’d rather focus on things I can control.
So, what are some areas where we can make a difference? Our local communities. As Americans, we have the power to create significant impact right where we live. Start by engaging with your local community through activities like volunteering at food banks, animal shelters, and local places of worship. These small acts contribute to the resilience and well-being of our neighborhoods.
Local elections arguably have a greater impact on the average American than federal elections, including the presidency. From school boards to county leaders, these elected officials influence crucial aspects of our lives—education, infrastructure, and even our tax rates.
The decisions made in public education directly affect our children and grandchildren. School boards, consisting of members who are our neighbors elected by us, are responsible for setting district policies, making critical decisions about curriculum, overseeing budgets, and determining the school district’s tax rate. Property taxes affect every homeowner directly and every renter indirectly.
Our county leaders also play a significant role. The county commissioners’ court is the governing body for our respective counties. They have broad responsibilities, including setting the county budget and tax rate, and overseeing infrastructure such as roads and bridges. We vote for the county commissioners and our county judge; they have a significant impact on our daily lives.
I’ve been in the wealth management industry since January 2015, and I’ve seen firsthand how clients’ emotions about presidential elections can sway their confidence in the market. This is my third presidential election as a financial advisor, and I’ve advised clients in both the San Francisco Bay Area and South Texas since 2018. Admittedly, there are unlikely two areas more far apart on political beliefs. However, both are passionate about elections and the potential impact on their financial well-being, specifically their investment portfolios.
Warren Buffett has always advised us to avoid the pessimism of election cycles. He noted, “For 240 years, it’s been a terrible mistake to bet against America.” Buffett’s advice reminds us that America’s resilience has carried us through wars, recessions, and countless political shifts. Yet, depending on which party has control over the White House, the opposition party often has a negative view about the state of the economy. Since 2000, the Pew Research Center has published data capturing this phenomenon.
In November 2016, when Donald J. Trump was elected, I walked into work on a cool, sunny day in Berkeley, CA. Clients in the lobby were close to tears, wanting to sell their investments due to fears of a potential World War III. As we know, there was no World War III, and under the Trump administration, the S&P 500 was up over 60 percent. Imagine selling on January 19, 2017.
In contrast, I was in Cuero, TX in November 2020 when Joseph R. Biden, Jr. was elected, and similar sentiments were expressed about a stock market plunge and global conflict. As of November 1, 2024, the S&P 500 is up over 50 percent under the Biden administration. Again, imagine selling on January 19, 2021.
Both administrations have dealt with stock market volatility, COVID-19, and geopolitical issues. Yet, the investors who did not bet against America prevailed. This teaches us that betting against America, regardless of the political landscape, can lead to missed opportunities in the long term.
So, instead of placing too much weight on national politics, let’s focus on what’s within our control. By engaging locally, we contribute to a resilient and thriving America.