Ryan Detrick, chief market strategist at the Carson Group, advises investors to focus on long-term investment strategies rather than attempting to predict political impacts on markets. This guidance comes as many consider recalibrating their portfolios based on assumptions about political changes. Despite popular belief, only 29% of funds managed to survive and outperform their average peer following an index over the decade ending in June 2024, according to Morningstar. Detrick emphasizes that attempting to anticipate policymakers’ plans is a challenging endeavor.
Active mutual fund and exchange-traded fund managers continually strive to outperform their benchmark indices. Energy has emerged as one of the best-performing sectors under the current administration, illustrating the complexities of predicting market trends. During President Donald Trump’s first term, energy stocks remained stagnant, yet since the start of his presidency, the energy sector has achieved a 133% return, surpassed only by the 189% return posted by technology firms.
“When President Biden took office, everyone thought he was gonna be great for green energy and terrible for dirty, old crude,” – Ryan Detrick
Detrick highlights that in the long run, stock movements are not typically influenced by the actions of the President or Congress. The ultimate goal is to build compounding returns over decades. He cautions against trying to anticipate the incoming administration’s plans for long-term portfolios.
“There may be some near term worry or excitement about potential policy, but big picture, that’s a difficult game to play.” – Ryan Detrick
Instead of focusing on political shifts, Detrick advises investors to pay attention to the Federal Reserve’s activities. The Fed’s influence on monetary policy can have significant impacts on market conditions, making it a more reliable indicator for investment decisions.
“It’s not worth getting mixed up in policy,” – Ryan Detrick
Morningstar, a financial data and research company, supports the notion that trying to pick winners is challenging for many investors. The Carson Group, a financial services company, underscores the importance of aligning investment strategies with long-term goals rather than seeking short-term gains.
Featured image courtesy of Due
