RVA financial advisor: Stock market rises anticipating 'divided government'

Posted at 10:54 PM, Nov 05, 2020

RICHMOND, Va. -- The week before the US presidential election, the stock market exhibited a volatility that could have caused an investor to consider selling and getting out.
But on Monday, the day before voters who hadn’t already cast ballots early headed to the polls, the market began to rise sharply higher.

Sandy Wiggins, from ACG Wealth Management in Midlothian, says that’s because market saw the prospect of a Biden win, but with Republicans retaining control of the Senate.

“Leading up to the election obviously, there's a lot of uncertainty around the different tax policies and regulations that might apply [with new leaders],” said Wiggins. “But then it became clear, that particularly with the Senate, there would not be substantial change.”

Wiggins says it’s what he calls “the Goldilocks scenario: you know, the market doesn't particularly like one party being control.”
He says stability in the regulations that govern finance and the markets, should continue, at least for the next couple of years.

But most important of all, according to Wiggins, is that investors not get cold feet should markets dip or even plunge. Because, he says, an uptick is likely in the future. “It's very difficult to time the market, because you have to make two very important decisions: when to get out of the market, and when to get back in,” said Wiggins. “Our philosophy is to take a longer-term approach to investment management.”

Displaying a chart showing different market returns over a 15-year period, he said just missing 10 of the best days in that period – because you didn’t stay committed- cut the average return from nine percent to just over four. “If you miss those 10 rebound days, or 20, you're likely going to suffer,” Wiggins said. “And we know that what goes down must come up, and oftentimes it's quick.”

So, he says, stay committed to your long-term investing strategy.



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