2020 Election: How Should You Invest?

hi Tom Gardner here with longtime Motley Fool contributor Morgan Housel and we're gonna talk a little bit about this election year for investors so Morgan gosh election years are very busy times in the news what does it mean for us as investors what happens in the markets over time and how should we think about investing now look we all have beliefs about politics we all have our sides and what we want to happen during election years and we all have investing views but I think when you mix those two together or even when those become anywhere near each other you almost always have bad decisions you have to keep those things as separate as possible there's a really long history during presidential years of very smart investors and certain economists saying if X wins the election buy these stocks if Y wins here's what's gonna happen to the economy and we can go back and look at how these have done and almost universally they have terrible track records I think it's just very easy to associate the the side that you want to win with an economy that's gonna do well and vice versa and there's a so much evidence that it's wrong I'll give you a few a few certain examples a la Google said in 2000 if President Bush wins by the bank stocks because there's going to be Bank deregulation banks are gonna do very well by the end of his term almost all the banks were out of work bankrupt this is the financial crisis people said if Barack Obama wins in 2008 by the green energy companies by the solar companies and if you had followed that advice the solar companies fell off a cliff because of competition from China so it's very easy to create a simple narrative around what's gonna happen tied to the election but the economy is so complicated that what actually happens in the world world is often totally defies what ever that simple merit I gave a speech in Houston during the last election and a man came out to me a little group of people after my talk just having a little conversation and he said well I've been invested for 30 years 30-plus years and I've really never sold I've remained in the market all the way through this election is so confusing to me and I believe he said that China is gonna step in and try and destroy our currency and I'm out I sold for the first time and I am 100 percent out of stocks and of course we then led into if it works it's a really incredible market and I think this is this is on both sides a lot of people really tie the the political fears that they have regard side that is into you know they can extrapolate that into the future so it's an emotional time and what we're saying is don't act on emotion but if none of these predictions are right what predictions are right what should we be doing I think you should do the same thing with your money regardless who who's gonna win you should be saving money in a way that that brings you closer to your goals buying good companies holding in for the long run regardless of what happens in Washington what happens this year for the election season I think that's what everyone should be doing and not changing it based off of who's in office okay good so what's one investment idea that you think people should think about now and I'll share one as well and will end the video I think more people should just be open to the idea that the United States still has a lot going for it relative to a lot of the other large countries in the world and if you were to look at the next 30 years which is I think how investors should be thinking I'm really bullish on the United States so just taking a really diversified view about how things are going I'm I'm still a big optimist on where things mean so almost everyone in the world should have vti int in their portfolio the Vanguard total market index fund it's just a fund that gives you total diversification across US equities you're solving a slice of capitalism and we know that that that fund will be down 10 percent at some point it'll be down 20 percent at some point but we feel pretty good looking out 5 and 10 and 15 years that you're gonna get an excellent return in equities by being a long term investor regardless of what happens during this election season Morgan thanks so much thanks [Music] you