What does Trump’s re-election mean for the markets? In this episode, Ben and Mark explore The Presidential Puzzle, a phenomenon revealing that equity risk premiums have historically been higher under Democratic presidencies than Republican ones. With Trump returning to office as the 47th U.S. president, they examine how voter risk aversion shapes political outcomes and market expectations, offering surprising insights into this intriguing connection between politics and investing. They also delve into market timing pitfalls, the importance of diversification, and how financial advisors can help investors navigate emotionally charged decisions. To wrap up, Ben and Mark reflect on listener perspectives and explore the intriguing future of Bitcoin in finance. Tune in to learn what Trump’s win means for expected stock returns and more!
Key Points From This Episode:
(0:00:18) Mark and Ben’s experiences at the Physician Financial Independence Conference.
(0:06:53) Republicans vs. Democrats: What the election results mean for the stock market.
(0:09:09) The Presidential Puzzle and how belief informs asset choices among voters.
(0:15:12) How risk aversion and the economy impact election outcomes and expected returns.
(0:20:08) What investors should and should not do with this information.
(0:24:38) The dangers of making financial decisions based on emotional predictions.
(0:30:02) Unpacking the relationship between global risk aversion and U.S. presidencies.
(0:31:20) Our aftershow segment: digging into recent reviews, the podcast topic puzzle, Ben’s recent trip to Boston, and Bitcoin.
Links From Today’s Episode:
Meet with PWL Capital — https://calendly.com/d/3vm-t2j-h3p
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582 Rational Reminder Website — https://rationalreminder.ca/
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://x.com/RationalRemind Rational Reminder on TikTok — www.tiktok.com/@rationalreminder
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.ca Benjamin Felix — https://pwlcapital.com/our-team/
Benjamin on X — https://x.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Cameron Passmore — https://pwlcapital.com/our-team/
Cameron on X — https://x.com/CameronPassmore
Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/
Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/ Mark McGrath on X — https://x.com/MarkMcGrathCFP
Episode 217: The Expected Returns of Financial Literacy — https://rationalreminder.ca/podcast/217
Episode 313: When Should You Hire a Financial Advisor? — https://rationalreminder.ca/podcast/313 Episode 124: Ľuboš Pástor — https://rationalreminder.ca/podcast/124
Papers From Today’s Episode:
‘Belief Disagreement and Portfolio Choice’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3934061
‘Political Cycles and Stock Returns’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2920401
‘The Presidential Puzzle: Political Cycles and the Stock Market’ — https://www.jstor.org/stable/3648176