Many Americans fear that the results of the 2024 presidential election will have a bigger impact on their retirement plans than market performance, demonstrating how politics and investing are becoming more intertwined, according to a new survey from the Nationwide Retirement Institute.
“We see more and more political polarization in the country,” said Eric Henderson, president of Nationwide Financial’s annuity business. “People are passionate on both sides, but when it comes to market conditions, especially stock market conditions, historically it really has had very minimal impact on the equity markets.”
Nationwide’s ninth annual “Advisor Authority” study polled 2,404 investors and found that 45% said the election will affect their retirement plans more than market performance.
Regardless of political affiliation, investors believe that the economy is heading for financial peril if the party they are less affiliated with takes up residency at 1600 Pennsylvania Avenue, the study found.
For instance, 32% of investors said that should the party they associate with less win the presidency next November, the country will then plunge into a recession within 12 months. In addition, 31% said such an election outcome would hurt their future finances, while another 31% believe their taxes would increase within a year.
In most instances, an investor would expect to go to their advisor to provide nonpartisan advice. However, advisors are not above the political fray and are prone to political influence as much as their clients.
In the survey, which questioned 507 advisors, 38% anticipated a volatile stock market in the next 12 months if the party they align with less wins the election next year. But advisors should concentrate on the facts and not be swayed by their political leanings, according to Henderson.
“Advisors, especially those who have been in the business for a while, have a lot more data at their hands,” he said. “They have a lot more access to information, and it’s their job to look at this information.”
Despite their political beliefs and predictions on the economy, many advisors are not allowing it to influence their advice to clients. More than half, or 56%, said their best advice is to stay the course during an election year.
“We look at things,” Henderson said advisors should tell their clients. “We don’t make major shifts unless there’s a strong reason to, and a presidential election is not a strong reason to make a shift.”