Navigating Election Uncertainty: The U.S. Economy as the Aircraft Carrier of the Global Market
When thinking about the U.S. economy, I often compare it to an aircraft carrier—the largest vessel in the ocean. Just like an aircraft carrier, the U.S. economy is immense, steady, and powerful. It can certainly change course, but it takes time to do so. The size and strength of the U.S. economy make it resilient to short-term events, including elections, and that’s important to remember, especially during times of political uncertainty.
As the most powerful nation in the world, the U.S. economy is a stabilizing force. While the president holds significant influence, the broader stock market and economy are driven by more than just politics. I believe that the role of the president, while important, is often overrated in terms of its impact on stock market performance. Yes, elections can create short-term volatility, but history shows that the market adapts and continues on its long-term path.
In Remembrance of 9/11: Resilience in the Face of Adversity
Today, on September 11th, we pause to remember the tragic events of 9/11 and honor the lives lost. That day marked a profound moment in U.S. history, both emotionally and economically. In the aftermath, the stock market temporarily shut down, and there was a sharp decline in investor confidence. However, much like the nation itself, the U.S. economy proved its resilience.
Despite the devastating impact, the market rebounded, and the economy adapted and grew stronger in the years that followed. The events of 9/11 serve as a powerful reminder that the U.S. economy has the ability to overcome even the most severe challenges, reinforcing the idea that, like an aircraft carrier, it is not easily knocked off course.
The Market and the Presidency: A Historical Look
When Donald Trump was elected in 2016, stock market futures took a nosedive. The market feared uncertainty and volatility. Yet, by the time Trump’s presidency ended, even after enduring the chaos of COVID-19, the market had surged to all-time highs. The U.S. economy, like that massive aircraft carrier, remained on course.
In 2020, when Joe Biden was elected, there was widespread concern that his policies would crush the stock market. Critics said the economy would falter under the weight of new regulations and taxes. And yet, here we are today, with unemployment near historic lows and the stock market trading close to all-time highs. Despite the political changes, the aircraft carrier has kept moving forward.
Long-Term Stability, Short-Term Opportunities
At RollingWave Capital, we know that while we invest with a long-term view, we can also take advantage of short-term events and market volatility. This sets us apart. Whether it’s an election, economic report, or market correction, we look for opportunities to position our clients for success. Navigating these shifts allows us to not only build stability over time but also benefit from moments of volatility.
Understanding the Larger Forces at Play
Even though the president of the United States holds the most powerful position in the world, the true drivers of the stock market—corporate earnings, innovation, interest rates, and global trade—have a far greater influence over time. Just as an aircraft carrier can’t easily change direction, the U.S. economy is shaped by larger, global forces that take time to adjust.
The Federal Reserve’s control of interest rates, for example, often has a more immediate and lasting effect on the market than any president’s policies. Changes in interest rates can drive stock prices, bond yields, and borrowing costs, affecting investors and businesses alike. While elections create short-term waves, the long-term direction is governed by these larger forces.
What Does This Mean for Your Portfolio?
In periods of political uncertainty, like elections, it’s important to remember that the U.S. economy remains the largest and most resilient force in the global market. It’s much like that massive aircraft carrier—steady, powerful, and capable of weathering short-term turbulence.
At RollingWave Capital, we focus on long-term growth and stability while actively looking for opportunities to capitalize on short-term volatility. Our ability to balance both perspectives helps ensure that our clients are positioned to succeed, no matter what happens in the political landscape.
Final Thoughts: Stay the Course
If you’re a current client, I hope this message reassures you during times of election-driven uncertainty. And if you’re considering working with RollingWave Capital, I’d love to show you how we take the guesswork out of investing by focusing on long-term growth and short-term opportunities. The U.S. economy may shift course occasionally, but like the aircraft carrier, it’s slow to turn and built to last.
Let’s keep our eyes on the horizon and stay the course. Thank you for your trust and partnership.
JC