PhotoYou may already be sick of presidential politics, but, unfortunately, things are just getting started. The first event of the primary season, the Iowa Caucus, is next week.

While the candidates are staking out their relative positions on the issues, one question you might not have considered is what happens to your stock portfolio when someone finally emerges from the long, painful slog as the winner? Does it really matter?

Certified Financial Planner (CFP) Board Consumer Advocate Eleanor Blayney says consumers who properly prepare don't really have to worry about it.

Hard to trade on political patterns

"Theories and opinions about the relationship of presidential elections and investment market performance abound," Blayney said in a release. "The problem with political patterns, of course, is that no sooner are they established then the value of trading on them often disappears."

In other words, it's hard to make investment choices based on who you think will move into the White House a year from now. Even if you knew for sure, there are still too many other things you don't know.

Instead, Blayney suggests staying focused on what's driving the markets and carefully consider how the election may influence things like:

  • Consumer confidence: As a rule, markets dislike uncertainty and in an uncertain year – with other factors besides politics causing nervousness – it might be wise to do some extra portfolio volatility-proofing. Blayney suggests taking a look at dividend-paying stocks rather than aggressive growth, and modest increases to high quality bonds and cash.
  • Business cycle: If you don't know who the new President will be, it's hard to know what his or her agenda will look like. That's why savvy investors should pay attention to the candidates' proposed tax policies and consider possible impacts in their personal wealth and portfolios.
  • Interest rates: Here a President's policies will have much less impact. Better to take your cue from the Federal Reserve.
  • Unforeseen events: You can count on unexpected geopolitical events to catch the world off-guard. When that happens, global funds seek safe havens, which Blayney thinks will serve U.S. markets well. If anything, she says, the regularity and stability of our electoral process testifies to our leadership as a global economic power and bolsters confidence in U.S. financial markets.

Just pay attention

So, while the 2016 presidential campaign is not without economic influence, Blayney says most investors should simply pay attention to it and not let it drive investment decisions.

"Your own agenda – rather than those of political candidates – should be the most important determinant in managing your portfolio," Blayney said.

And it goes without saying, it is always wise to consult a trusted and objective financial advisor when making major changes to your portfolio.

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