RZH Insights: “How Do I Invest with Trump as President!”

Important Note: The following is not intended as a political commentary. My goal is to present statistical facts and relevant historical depictions. The thoughts and recommendations presented below are my own, stem from 34 years of experience guiding investors through numerous crises, and do not necessarily reflect the views of anyone else at RZH Advisors.

Unsurprisingly, we’ve been receiving a lot of calls about this – especially after President Trump’s address to Congress on Tuesday, March 4th.

I understand the concern. How can you possibly make sense of the news, let alone craft an investment strategy, when confronted with headlines like these from before and after the election:

“If Trump Wins, It’s the End of the World As We Know It”1

“A Trump Win Would Sink All Boats”2

“Donald Trump Presidency ‘Would Be Dangerous,’ Economists Warn”3

“President Trump Would Be a Global Calamity”4

“Donald Trump wins presidential election, plunging US into uncertain future”5

“Donald Trump’s Victory Is a Disaster for America and the World”6

“The Presidential Election…An American Tragedy”7

“Trump Triumphs: A Shocking Upset That Shakes the World”8

“The unthinkable has happened: America elects Donald Trump”9

“It’s tough to make predictions, especially about the future.”
- Yogi Berra

Unfortunately, we don’t have a crystal ball. When faced with headlines like these, it can be difficult to remain optimistic. Given this level of fear and concern, it’s understandable that you might consider making a change to your portfolio.

That said, I have a confession…the headlines above are not from this presidential election but from 2016, following Trump’s victory over Hillary Clinton. As you can see, similar fears and concerns have surfaced before.

I even wrote a newsletter on February 14, 2017 titled “Trump Fear…Is it time to change my strategy?”  In that newsletter I include this article, written by the NY Times, with a timeless message and which could easily be republished today without any edits.

Even with an abundance of fear, during President Trump’s first term, the S&P 500 rose about 83%, delivering an annualized return of 16%. Remarkably, volatility was below average during these four years, even with a 20% market decline in 2018 and a 34% drop in early 2020.10

Now, at this point, half of my readers are probably unhappy with me.

So, for the other half, let’s rewind again – this time to Joe Biden’s presidency. I remember receiving the same anxious calls back then from the other half of my client base. Yet, the S&P 500 still rose about 65% under Biden, with an annualized return just under 13%. 11

Both presidents oversaw above-average market returns.  How did this happen when the last eight years have inarguably seen the most partisan political environment, and fear of the other, in our lifetime? 

I submit that it wasn’t about politics or those in charge, but rather due to the American spirit, innovation, and our resiliency. It was about the relentless drive of great American companies to adapt, strategize, innovate and create value – regardless of political turbulence or global uncertainty.  This is why the mantra “Don’t mix politics with your portfolio” is more relevant than ever.

“This Time Is Different…”

These are considered the four most dangerous words in investing. The media is screaming that we must take action and “do something.” The urge to react – to protect oneself – is powerful and is driven by a feeling of fear and helplessness. I understand this. It’s one of the hardest temptations I’ve had to resist to be a disciplined investor and successful for my clients.

“It ain't what you don't know that gets you into trouble.
It's what you know for sure that just ain't so.”
– Mark Twain

At a time like this, the fundamental question is: Are you an Investor or a Speculator?

  • If your investment approach is rooted in a long-term plan – one that we’ve carefully crafted and refined together – then you’re an Investor.
  • If your strategy shifts based on headlines, economic predictions, or market volatility, then you’re a Speculator.

Here’s the key difference:

  • Investors stick to a well-thought-out plan, regardless of market noise.
  • Speculators react – or worse, try to predict what happens next.

All of that being said, what I think I know for sure is that there is going to be a significant amount of volatility over the next year as global markets analyze and digest the firehose of policy coming out of Washington. President Trump promised as much in his speech on Tuesday when he said “Will there be some pain?  Yes…”

When Is It Actually Time to Move to Cash?

In my 34-year career, there have been only two moments where I seriously considered moving clients out of stocks and into cash:

The 2008 Financial Crisis – A truly existential threat to the global financial system that almost incinerated world financial markets.

Early 2020 (COVID-19) – A completely unknown threat with potentially catastrophic mortal consequences.

In 2008, we took moderate action. In 2020, we held tight – and ended up buying near the bottom.

This moment is not presenting like 2008 or 2020. History tells us not to speculate. Let RZH help you remain an Investor.

The Bottom Line – You Can’t Predict the Future, You Can Only Plan For It

Markets have experienced a Trump Presidency before and come out the other side ahead. We understand and are sensitive to your concerns. In particular, I tremendously appreciate your calls, perspectives and the insights from our clients in the business community who are on the front lines of the tariff battles. 

We have carefully crafted our client’s financial plans to weather economic uncertainty (like what we are experiencing today) and to achieve their most cherished objectives. When doing this we:

  • Strategically allocate to cash, Treasurys, and short-term bonds to cover years of financial needs – keeping multiple years of cash flow “out of harm’s way.”
  • Focus on implementing probability-based strategies
  • Own high-quality investments, historically known for handling volatility
  • Take profits off the table during the good times, before the storm hits
  • And perhaps most importantly, we constantly remind our clients that the worst plan is the one not followed.

I know this is a difficult time for our country. We stand with our clients and are here for you, no matter what. Together, we’ll navigate through this turbulence and emerge stronger on the other side.

It’s an honor to be a part of your financial journey. At RZH, we all embrace the significant responsibility of managing your wealth so that you can live your best life and protect those you love.

Please don’t hesitate to reach out. We’re here to discuss your concerns and ensure your plan remains resilient.

Warmest regards,

Carl J. Zuckerberg, CFP®, AIF®, CIMA®
Principal, Chief Investment Strategist

[1] The Daily Beast. October 25, 2016.

[2] The New York Times. October 31, 2016.

[3] The Guardian. August 3, 2016.

[4] Foreign Policy. March 7, 2016.

[5] The Guardian. November 9, 2016.

[6]Slate. November 9, 2016.

[7] The New Yorker. November 9, 2016.

[8] TIME Magazine. November 9, 2016.

[9] The Washington Post. November 9, 2016.

[10] YCharts. S&P 500 January 20, 2017 to January 20, 2021.

[11] YCharts. S&P 500 January 20, 2021 to January 20, 2025.

RZH Insights – Market Predictions vs. Reality: What You Need to Know

It’s prediction season again and many of the largest banks on Wall Street have come out with their 2025 stock market forecasts. Recently, Goldman Sachs made a bold prediction: the S&P 500 would deliver just a 3% annual return over the next decade1. Considering that historical returns have averaged closer to 11% since 19452, this forecast has come as a surprise and led investors to wonder what this might mean for their portfolios. 

Before reacting to such projections, it’s crucial to take a step back. Financial forecasts, even from well-known Wall Street institutions, are far from crystal balls. Why? Because they’re based on a mix of current data and future assumptions, which are largely unpredictable and ever-changing. 

Let’s explore why financial forecasts are often unreliable, the motivations behind these predictions, and, most importantly, how to stay focused on what truly matters for your financial future. 

Why Financial Forecasts Are Often Unreliable 

Forecasters – even the largest, most recognizable investment banks – base their predictions on data available today, combined with assumptions regarding future economic trends, interest rates, corporate earnings, and global events. If history has shown us anything, it’s that the world economy and financial markets can change quickly and dramatically, often in ways that are impossible to foresee. 

Take a moment to think about it: Did anyone see the pandemic coming? Or the tech boom that followed? And these are just a couple of examples from the recent past. Nobody, not even the best minds in finance, with vast resources at their disposal, can account for every twist and turn in a dynamic global economy. Goldman Sachs’ current projection might accurately reflect today’s landscape…although even this is debatable…, but in a decade, a year, or even a month, the landscape may be vastly, and unforeseeably, different.   (Pre-COVID everyone knew AI was in development, but few predicted its impact, adoption, and success.  Two years ago, no one had even heard of ChatGPT. In February 2020, Nvidia stock (a maker of chips for the AI industry) traded around $5 per share; as of year-end 2024, it traded around $134, up almost 27x.)3 

Each year, major banks release forecasts for the annual return of the S&P 500 Index. However, these predictions often miss the mark, resembling more of a dart-throwing exercise than precise analysis. Over the last 7 years, the median forecast return for the S&P 500 from twenty of the largest banks and asset managers has not even been within 10% of actual returns, with forecasts ranging from underestimations of 26% to overestimations of 21%.4 

In 2024, major banks projected S&P 500 returns ranging from -12% to +13%, with a median estimate of 2.2%. However, the actual return for the year was 25.02%. 4,5 The closest prediction underestimated the real outcome by nearly half, while the most inaccurate forecast missed the mark by a staggering 37%.4 If you had based your investment decisions on these projections, your portfolio’s performance could have been drastically different, highlighting the risks of relying on such forecasts. 

The Motivations Behind Forecasts 

“Asset bubbles and the desperate search for profits amid negative rates aren’t laughing matters.  
Be afraid.” 6
-Bloomberg, 2019

This quote comes from an article published on December 19, 2019. Since then, the S&P 500 Index has risen by over 100%.5 It’s essential to recognize the incentives behind financial predictions and headlines such as the one above. Analysts and financial publications aim to generate clicks and engagement, not necessarily to provide accurate predictions. Articles titled “No One Knows How the S&P 500 Will Perform This Year” are less likely to attract attention compared to bold, specific forecasts. 

Some forecasters employ a strategy of making multiple, widely varying predictions. This approach allows them to highlight whichever prediction comes closest to reality while ignoring the others. 

In fact, a few weeks after Goldman Sachs made their prediction that the market would return 3% annually over the next decade, their chief US equity strategist, David Kostin, forecast that the S&P 500 would hit 6,500 by the end of 2025.7 This represents about a 10.5% gain from December 31, 2024 values. It would be difficult for this prediction and the original 3% prediction to both be accurate. 

Focus on Long-Term Strategy, Not Short-Term Forecasts 

Instead of trying to adjust your portfolio for every prediction, we remind clients to focus on what you can control: 

1. Your Investment Goals: Set clear, achievable objectives based on your needs, not market conditions.

2. Your Time Horizon: Remember, time is the market’s greatest equalizer. The longer you stay invested, the more you can benefit from compounding returns.

3. Diversification: Build a diversified portfolio that spreads risk across different asset classes, sectors, and geographies. This cushions you from the impacts of any single market forecast or downturn. 

4. Discipline: Sticking to your financial plan by following time tested strategies and investment management principles during times of maximum uncertainty.

5. Patience: Tolerating interim volatility allowing markets to complete their full cycle. This allows different asset classes to benefit from historical performance patterns. RZH maintains sufficient levels of cash and bonds to meet your needs so you will never be a “forced seller” in an unsavory stock market period. 

Stay Disciplined 

Today we are constantly bombarded with new information telling us our current financial environment is “unprecedented”8 and questioning “What if this time is different?”9 

When you encounter the latest forecast or catchy headline, remember: while analyst market predictions may change, a well-crafted investment strategy should not be altered to accommodate them. By sticking to a long-term, disciplined approach, you can build wealth without the stress of trying to predict where the market will go next. Our goal is to help you enjoy life to the fullest, knowing you have a plan that makes any headline or sensationalist prediction irrelevant to your financial future. 

Best regards,

Brendan McEwan, CFP®, CIMA®

Senior Financial Advisor

[1] Global Strategy Paper. Goldman Sachs, October 18, 2024.

[2] “S&P 500 Average Returns and Historical Performance.” Investopedia. December 26, 2024.

[3] “NVIDIA Corporation.” Yahoo! Finance. NVDA Stock Prince February 25, 2020 – February 25, 2025. 

[4] “Taking a Holistic View of Your Investment Journey.” Avantis Investors. November 2023.

[5] YCharts. 

[6] “A Funny Thing Happened on the Way to the Stock Market Record.” Bloomberg. December 19, 2019.

[7] “Here’s where the stock market is headed in 2025, according to Wall Street’s top strategists.” CNBC. December 13, 2024.

[8] “For Investors, What if This Time is Different?”. New York Times. October 27, 2024.

[9] ‘We are in an unprecedented era of inflation’: Financial confidence drops throughout the U.S., experts say. WIFR. February 20, 2025.

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RZH News – New Partner Announcement

RZH Insights- Believing vs. Knowing: The Important Transition We Tend to Underestimate

Retirement is a monumental transition, one that often comes with a mix of excitement and uncertainty. In today’s culture, we enthusiastically celebrate milestones like graduations, marriages, and becoming new parents. We even recognize smaller achievements such as a child’s first step, running a 5K, or getting a promotion. Yet, one significant life event that doesn’t often get the attention or preparation it deserves is retirement. Yes, there are retirement parties and celebratory trips, but the challenges often begin after the festivities are over. 

Retirement marks a significant milestone, representing a shift from the demands of daily work to a life hopefully focused on relaxation and enjoyment. However, many retirees often experience stress and anxiety during this period. Despite being physically or mentally ready to stop working, the financial readiness to transition from a saving mentality to a spending mentality can be daunting. Questions about maintaining a particular lifestyle, market volatility, and whether there is enough saved for retirement can create ongoing worry. 

This transition also signifies a significant identity shift. The work done for decades fades into the background, and the certainty of a regular paycheck disappears. Suddenly, the nest egg that has been saved must support you for the next 30-40 years. Will it be enough?  

Most retirees “think” or “believe” they have enough, but do they “know” they have enough? According to CNBC, roughly 47% of Americans feel their ability to be financially secure in retirement will require a “miracle”1.  This statistic truly highlights the need to understand your financial situation in a more comprehensive way.  

Key components of a successful retirement include understanding your financial health, setting clear goals, adapting to change, and conducting regular reviews. There’s no one-size-fits-all approach; each individual and family is unique. It’s not about what you think you should do, but about enjoying this new phase of life in a way that brings true satisfaction.  

We believe that financial planning goes beyond simply accumulating wealth—it’s about understanding what that wealth can do for each client.  When we work with clients, we don’t just focus on the numbers. We ask them, “What are your dreams and aspirations?” Whether it’s spending more time with family, traveling, or checking off bucket list items, we work with clients to craft a strategy that helps to align their financial resources with their non-financial objectives.  

Imagine going into retirement with more than just the reassurance that you have enough.  A robust financial plan can help clients make informed decisions and approach retirement with confidence, optimism and a clear vision for the future. Through open discussions about future goals, and creating a personalized strategy, clients should feel supported and empowered to enjoy the fruits of their hard work. 

At RZH, our mission is to work alongside our clients to help them live tomorrow as they do today, with the confidence that comes from having a carefully designed plan aimed at supporting the lifestyle they envision. No matter where you find yourself in life, we are thankful for the chance to support you on your financial journey. 

Warm regards,

Lauren Rowland, CFP® CDFA®

Principal

[1] “47% of Americans say achieving retirement security will take a miracle. Why inflation is to blame.” CNBC. September 13, 2023.

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RZH Announcement – Introducing Ivy Alexander!

Dear Clients & Friends,

At RZH Advisors, we believe that our clients are at the heart of everything we do. We are dedicated to consistently exceeding your expectations and remain committed to helping you embrace life to the full extent of your wealth.

In pursuit of our mission, we are thrilled to introduce Ivy Alexander, Client Services Associate, to the RZH Advisors team!

Beyond her professional life, Ivy enjoys spending quality time with her children and exploring new cultures through travel. Having grown up in Hartford and spending the last 20 years in Baltimore, MD,  Ivy values both family and personal growth, constantly seeking new challenges to further her career and life experiences.

Please join us in welcoming Ivy to our team and we look forward to our clients getting to know her in the years to come!

RZH Special Memo – RZH Advisors Named a Top RIA Firm by Forbes|Shook in 2024

RZH Advisors is excited to announce that we have been recognized as one of America’s Top Registered Investment Advisors (RIA) for 2024 by Forbes, in partnership with SHOOK Research, for the second year in a row!1 This prestigious ranking highlights RZH Advisors’ commitment to providing a differentiated wealth management experience and life-changing outcomes for our clients.

“We are truly honored to be included in the Forbes|SHOOK list of top RIA firms,” said Carl Zuckerberg, Founding Principal of RZH Advisors. “This recognition is a testament to the dedication of our entire team and their passion for helping our clients live life to the fullest and optimize their wealth.”

The Forbes|SHOOK ranking process is based on a rigorous methodology that includes both qualitative and quantitative factors such as client retention, revenue trends, assets under management, and industry experience. Firms are also assessed on their compliance records and best practices in client service.

This recognition further solidifies RZH Advisors’ position as a leader in the wealth management industry, and the firm remains committed to building long-term relationships with clients through a collaborative and client-centric approach.

A heartfelt THANK YOU to our clients for your trust and confidence, which means the world to us. We also wish to express our deepest gratitude to our devoted team members, whose tireless efforts, great skill, and steadfast commitment to client success are instrumental in attaining this accolade.

To review the complete Forbes|SHOOK 2024 America’s Top RIA firms and important ranking methodology, please CLICK HERE.

  1. Forbes|SHOOK 2024 America’s Top RIA Firms published October 8, 2024, using data from June 30, 2024. RZH Advisors did not provide or receive compensation for inclusion in this ranking.

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RZH Insights: Mid-Year-Ish Update and Observations

Dear Clients and Friends of RZH:

As always, I cannot believe we’ve well-passed the mid-point mark of the year. I’ve started to write this mid-year memo a few times since June 30th, only to have dramatic geopolitical events and extreme intraday market volatility throw a wrench into the narrative and make my comments seem untimely.

However, at RZH we know to expect the unexpected, and therefore continue to stay vigilant and focused on our mission:

We empower our clients to live life to the fullest by striving to optimize their wealth and seeking to ensure market fluctuations are irrelevant to their financial security. We aim to meaningfully enhance financial success, creating a positive impact on the futures of our clients and their loved ones.

Delivering on this, irrespective of drama from current events and the media’s shrieking, can be challenging. Combined with the realities of human nature, ignoring market volatility may not always be possible – I get it. However, a key to generating, preserving, and endowing multigenerational wealth is to avoid believing that “this time it’s different” and instead embrace the words “this too shall pass” – even if you can’t immediately see how or when the current “crisis” will end.

Our portfolios and financial plans are built with the goal of making current events and market volatility irrelevant to your financial security. So, as I usually do in these reports, I ask that we remember a handful of what I regard as timeless truths about enduringly successful wealth management. Then we can proceed to some more current observations.

General Principles of the RZH Advisor’s Investment Philosophy

We are goal-focused and planning-driven, prioritizing long-term investment success through consistent implementation of a plan, rather than reacting to market events. History shows that the economy cannot be reliably forecast, nor markets consistently timed. As long-term investors, we work towards your lifetime goals without attempting to predict markets, which historically has a low success rate. Knowing this, we believe that the only way to be sure of capturing the full premium return of stocks is to ride out their frequent, but ultimately temporary declines.

Factors which add a significant amount of value to an investment plan are: (i) keeping costs low, (ii) being diversified, (iii) focusing on tax efficiency, (iv) staying liquid, and (v) matching asset allocation and investments with objectives.

We believe the focus of planning-driven portfolio management remains unchanged:

  • The performance of a portfolio relative to a market benchmark is largely irrelevant to long-term financial success.
  • We believe the only relevant benchmark is the one that indicates whether we are on track to accomplish your goals.
  • Risk should be measured as the probability that we will not achieve your goals.
  • Investing should have the exclusive purpose of minimizing the risk of not achieving your goals.

Current Commentary

The first part of 2024 can simply, but accurately, be summed up in two observations. (1) The U.S. economy continued to grow, however modestly[1]. (2) The equity market, responding to accelerating earnings growth and dividend increases, did very well – the S&P 500 rose more than 15% by June 30th[2].

Economic growth remained marginally positive, continuing to avoid recession, while job growth continued relatively strong[3]. Inflation slowed modestly, providing the Federal Reserve with no urgent prompting to reduce interest rates.

Monetary policy remains gently but quite firmly restrictive – that is, the fed funds rate is well above the inflation rate – this is beneficial for long-term investors. Getting inflation down to the Fed’s target of two percent remains the priority[4].

Tsunami Warning

However, this exact narrative (which led to all-time highs in the S&P 500 and NASDAQ) was quickly tested over the last week [5].  In a split second, news last week of the Fed holding interest rates steady, suddenly created fears of a recession.  In addition, something called “the unwinding of the Japanese Yen carry trade” resulted in US markets selling off quickly – with international markets fairing even worse. The Japanese stock market fell by more than 12% today alone!  So much for the celebrated “soft landing!”

As we have coined it: “the velocity of volatility” is once again on full display this week.

However, downturns and corrections are completely normal. A 5% downturn has occurred in 94% of all years since 1928. A 10% correction has historically occurred in around two-thirds of all years [6].

Even so, corporate earnings and dividends are at record levels [7].

Earnings and dividends are the variables that ultimately drive the long-term value of our core equity investment strategy: ownership in a broadly diversified portfolio of enduringly successful companies. Not the national debt; not the looming election; not the presence or absence of Fed rate cuts; not war(s); not the onset of the next regularly scheduled government shutdown, or whatever “crisis” comes next.

I continue to believe that the more we focus on the fundamental strengths of our portfolio construction and core assets, the more we are able to tune out the noise, and the less danger we will be in of emotional overreaction to gyrations in the stock market.

During these uncertain times, and more than ever…

  • I believe in our planning.
  • I know that our portfolio construction process is resolute.
  • I love what we own in our portfolios.
  • I am supremely confident in our ability to deliver on our mission statement.

Thank you, as always, for being our clients. It is a privilege to serve you.

Best wishes for a wonderful continuation of your summer,

P.S.   With less than 100 days until the election, the volume is going to get turned way up and anxiety and uncertainty can run high.  As my colleague Brendan McEwan wrote about last month, please avoid the temptation to let politics interfere with your portfolio.  Call us if you need to discuss your feelings or inclinations to do something with your investments.  Regardless of the outcome, in time the great companies will navigate through it, or around it.

[1] US economic growth for last quarter is revised up slightly to a 1.4% annual rate. AP News. June 27, 2024.

[2] S&P 500 Index performance as measured for the period January 1, 2024 – June 30, 2024, assuming dividend reinvestment.

[3] Another month of robust US job growth points to continued economic strength. AP News. April 5, 2024.

[4] The Fed left rates unchanged in July but may still make a cut before the end of the year. Here’s what it means for your money. Fortune. July 31, 2024.

[5] All 3 major stock indexes close at record highs as inflation slows down. The Hill. May 15, 2024.

[6] This is Normal. A Wealth of Commonsense. August 4, 2024.

[7] High Corporate Profits Go to Dividends and Cash Stockpiles. Forbes. March 20, 2024.

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RZH Announcement – RZH is Growing, Growing, Growing!

At RZH Advisors, we love celebrating milestones with our clients, friends and team members.  

Celebrating New Beginnings 

The RZH family is thrilled to announce the arrival of three beautiful new bundles of joy!  Please join us in congratulating our team members and their families on these joyous occasions: 

  • Lauren Rowland and Family: Lauren, Partner, is excited to introduce her son, Aidan, born on March 20, 2024. Lauren, husband Ricky and big sister Sadie are basking in the love and excitement that a new baby brings.
  • Brendan McEwan and Family: Brendan, Senior Financial Advisor, welcomed a baby boy, Liam, on December 27, 2023. Brendan, wife Jackie, and big sister Chloe are doing well and enjoying this precious time with their new addition. 
  • Breanna Gabriel and Family: Breanna, Financial Analyst, celebrated the arrival of her first child, a baby girl, Charlotte on February 23, 2024. Breanna and her husband Chris are cherishing these early moments with their newest member. 

These new additions remind us of the importance of family and the joy that comes with new beginnings. At RZH Advisors, we value the balance between professional dedication and personal fulfillment, and we are thrilled to support our team members as they embark on these new chapters in their lives. 

Our Commitment to You 

As our team grows, so does our commitment to providing you with the extraordinary service and personalized advice you have come to expect from RZH Advisors. We remain dedicated to helping you achieve your goals and navigate your financial journey with confidence. 

Our team is here for you, and we look forward to continuing to serve you with the same level of care and capability – even though Brendan, Breanna and Lauren may be a little sleep deprived!

Thank you for being a valued part of the RZH Advisors community.  Together, we celebrate life’s special moments and look forward to a bright and prosperous future. 

RZH Insights – Presidential Elections & Your Portfolio: Separating Fact From Fiction

As November approaches, it’s natural to wonder about the impact of presidential elections on investment strategies. Every four years, the political landscape undergoes a potential seismic shift, and investors often brace themselves for possible market turbulence. During presidential election years, a common question we hear, regardless of your political party affiliation is: what happens to the markets and my portfolio if the winning candidate does not align with my political views? And since we have no way to know for certain who will win, should we consider changing our investment plan? While we acknowledge the concerns inherent in asking these questions, it is essential to separate the noise from the facts. It’s time to debunk the myth that the political party in power determines stock market success.

The Myth of Party Influence

One common misconception is that the political affiliation of the incoming president significantly influences stock market performance. Historically, there’s been a prevailing belief that Republican administrations are better for markets due to their pro-business policies. Conversely, some argue that Democratic leadership fosters economic growth, which translates into positive market outcomes. Empirical evidence shows that the stock market is indifferent to which political party occupies the White House and numerous studies have debunked the notion that stock market returns are tied to the party affiliation of the president[1]. The S&P 500 index, which represents a broad cross-section of the U.S. equity market, has demonstrated remarkable resilience, irrespective of who sits in the Oval Office.

Data-Driven Insights

An investment of $1,000 in the S&P 500 when Franklin Delanor Roosevelt (“FDR”) was elected president in 1933 would have grown to over $21,000,000 by December 31, 2023[2]. During that time there have been seven Republican and eight Democratic presidents. Looking at this another way, the annualized median performance of the Dow Jones Industrial Average (“DJIA”) since the early 1900s was 7.9% under Republican Presidents and 7.7% under Democratic Presidents[3]. Regardless of which political party occupies the White House, the stock market has exhibited positive returns in the vast majority of cases. This resilience underscores corporate America’s ability to adapt to changing political landscapes and economic policies.

SOURCES: Capital Group, RIMES, Standard & Poor’s. Chart illustrates the growth of a hypothetical $1,000 investment in S&P 500 Index beginning on March 4, 1933 (the date of Franklin D. Roosevelt’s first inauguration) through December 31, 2023, assuming dividend reinvest, and taxes paid from an alternative source. Dates of party control are based on inauguration dates. Values are based on total returns in USD shown on a logarithmic scale. Investors cannot directly purchase an index. Past performance does not guarantee future results and individual investment performance will vary.

Simply put, investment markets hate uncertainty, and the backdrop of a presidential election year creates a heightened level of volatility in the capital markets. Historically, this trend persists through the campaigns and ultimately the volatility reduces further once a president is elected. It’s important to note that regardless of which party is elected, after the election, markets have often exhibited upwards trajectories, reaffirming the resilience of a long-term investment strategy. So far 2024 has held true to historical trends with increased volatility in the earlier stages of the year with both the Dow Jones Industrial Average and the S&P 500 reaching new all-time highs[4]. As fewer questions remain and more becomes clear, we expected that this heightened level of volatility may subside.

Factors Driving Market Performance

Instead of fixating on political rhetoric, it is important to adhere to the principles outlined in your financial plan. Investors can mitigate the impact of election-related volatility by maintaining a diversified portfolio and staying committed to a long-term investment strategy.

While presidential elections may introduce temporary fluctuations in market sentiment, it’s crucial to maintain a disciplined approach to investing. Rather than attempting to time the market based on political conjecture, we believe investors should prioritize asset allocation, risk management, and financial planning objectives. In the customized plans we’ve crafted for each of you, we’ve established a unique strategy tailored to help you achieve your financial goals. The key is to stick to this strategy, even through investment uncertainties and periods of market volatility. The financial controls that we build into our portfolio allow our clients to weather these bouts of volatility and not have to trade during this uncertainty.

Conclusion

We remind clients that investing in a presidential election year requires a solid financial plan, a focus on long-term fundamentals, and adhering to a well-defined strategy, regardless of who occupies the White House. While political headlines may grab attention, they often have limited bearing on overall market performance. By staying informed, maintaining a diversified portfolio, and adhering to sound investment principles, we can help you better manage election-related uncertainties.

We are always here for you, thank you for being our clients and trusting us with your financial journey, it is a genuine privilege to serve you.

If you are interested in learning more, Capital Group does a great job of compiling this data every 4 years. Please click here to read their full report.

Best regards,

Brendan McEwan, CFP® CIMA®

Senior Financial Advisor

[1] “Investing and Politics”, BESPOKE Investment Group, 2024

[2] “Guide to Investing in an election year”, Capital Group, 2024 Edition. The calculation assumes a hypothetical $1,000 investment in the S&P 500 Index beginning on March 4, 1933 (the date of Franklin D. Roosevelt’s first inauguration) through December 31, 2023, assuming dividend reinvest, and taxes paid from an alternative source. Full calculation methodology available upon request. Investors cannot purchase an index directly.

[3] “Investing and Politics”, BESPOKE Investment Group, 2024. DJIA returns Under US Presidents Since 1900. Percent change is calculated through for the period of September 14, 1901 – March 20, 2024.

[4] “S&P 500 jumps 1% to post record close, ending session above 5,300 for the first time”. May 15, 2024. https://www.cnbc.com/2024/05/14/stock-market-today-live-updates.html.

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RZH Special Memo – Carl Zuckerberg Named to Barron’s Top 1200 Financial Advisor Ranking for 2024

RZH Advisors proudly announces that Carl Zuckerberg, Co-Founder and Chief Investment Strategist, has been recognized by Barron’s as one of the Top 1200 Financial Advisors for 20241. This prestigious accolade is a testament to Carl’s dedication to our clients – striving to continuously improve their lives and strengthen their financial position.

Barron’s, one of the most respected publications in the financial industry, conducts an extensive review process to identify the top financial advisors across the United States. Their methodology includes assessing factors such as quality of practice, business growth, regulatory record, assets under management, and philanthropic work. Carl’s inclusion in this notable list highlights both his and RZH’s commitment to clients and their financial success.

With over 30 years of experience in the financial services industry, Carl guides the firm’s investment management and portfolio construction process. He is known for his holistic, yet disciplined, approach to investment management and his ability to demystify investing while crafting solutions to meet each client’s unique needs and goals. And, just like the numerous accolades Carl has received in the past, this recognition belongs to every team member at RZH.

“I am grateful to be named to Barron’s Top 1200 Financial Advisors for 2024,” said Carl. “However, this recognition really reflects the trust and confidence that our clients have placed in all of us at RZH Advisors. It is truly our remarkably talented team, who collectively, produce such outstanding results for those we serve.”

Congratulations Carl and thank you for helping RZH clients embrace life to the full extent of their wealth!

To learn more about the methodology used by Barrons for the Top 1200 Financial Advisors ranking please click HERE.

1. Barron’s “2024 Top 1200 Advisor Rankings by State” was published on March 15, 2024, based on assets under management, revenue produced for the firm, regulatory record, quality of practice, and philanthropic work as of September 30, 2023. The data used in this ranking is provided by individual advisors in conjunction with regulatory databases. No compensation was exchanged in consideration for this ranking.

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