Editor's note: It's an election year... But don't get lost in the constant news coverage. According to Vic Lederman – the editorial director of our corporate affiliate Chaikin Analytics – you shouldn't move your money based on every political story. In this piece, published yesterday in the free Chaikin PowerFeed e-letter, Vic dives into the latest "distraction" in U.S. politics... and explains why it's no reason for investors to run for the exits.
Folks, we're already seeing a "national distraction" play out...
We all know 2024 is an election year. And that means the media is running full tilt. As my colleague and Chaikin Analytics founder Marc Chaikin said last week...
This is a critical moneymaking moment for the mainstream media and their advertisers. Keep in mind that 2023 was a terrible year for cable news. Some networks lost up to a quarter of their average audience in just 12 months.
That means the networks will do everything they can to keep your eyes on their election coverage.
For investors, though, the endless play-by-play chatter is just noise. And it could lead you to miss a huge opportunity that's unfolding in stocks right now.
Today, we're seeing a not-so-new form of this distraction in the headlines. The media and politicians seem to love it.
But average Americans – the "mom and pop" investors – hate it.
Now, I'm no fan of politics. At Chaikin Analytics, our goal is to uncover investment opportunities – no matter what's going on in the political landscape.
But the problem is simple. This national distraction will leave some investors sitting on the sidelines.
It will derail investment plans. And it will make fools of the investors that don't respond to it correctly.
So today, we're wading into the muck and uncovering the real meaning of this latest distraction...
If you haven't heard already, yet another government shutdown is looming.
Unless the government acts, parts of government food, housing, and veterans' programs will lose funding this Friday at midnight.
This would be a partial shutdown. The rest of the funding will run out at midnight on March 8.
In the coming days, the mainstream media will increasingly be all over the story. And you'll get to see all the finger-pointing, too...
But we're not here to discuss that. We're looking for opportunities in the market.
And as it turns out, the government shutdown just isn't that relevant to investors.
The chart below shows the benchmark S&P 500 Index since 1990. I've added a blue dot for each government shutdown we've had since then. Take a look...
Normally, when I share a chart, you'd expect to see a clear pattern. But this one is a little different... because it shows these shutdowns just don't have a whole lot to do with the stock market.
We've had six government shutdowns since 1990. They've cost the U.S. government about $7.5 billion.
Sure, these events can be painful for people. Shutdowns delay government spending on goods and services. They also cause a lot of uncertainty for furloughed federal workers.
But on the macroeconomic level, over the long term... it's just a distraction.
So as the election cycle heats up, expect a lot of fiery rhetoric on both sides of the political aisle. And be ready to hear every doom-and-gloom scenario the media can cook up.
But remember, politicians are going to do just about everything they can to score their points during an election year. Don't let them fool you.
There are opportunities in this market. You just need to know how to look past the distractions.
Good investing,
Vic Lederman
Editor's note: This election year could blindside investors... but not for the reasons you might think. Most folks are missing this story entirely. So to cut through the "noise," Marc Chaikin is stepping forward tomorrow night with a critical 2024 forecast.
Marc believes a dramatic market event has a 90% chance of rocking U.S. stocks around the Super Tuesday primaries. This may be the most important prediction of his 50-year career. So make sure you tune in to tomorrow's broadcast... Click here to learn more and save your free spot.
Further Reading
Instead of hiding their money "under the mattress," folks are putting their hard-earned cash to work in stocks. But we still have a long way to go before sentiment peaks. That means more gains are likely – especially given today's political backdrop... Read more here.
"The stock market reacts well to elections," Sean Michael Cummings writes. Some investors might think election years are dangerous. But history shows that's not the case. If you look at the data, presidential elections actually support the stock market... Learn more here.