Jessica Ness, CFP®
Jessica Ness, CFP®Senior Vice President, Financial Adviser, Principal

CJM recently hosted a captivating webinar with John B. Emerson from Capital Group, the parent company of American Funds. We invited John to share his insights on the economy and the impact of the upcoming elections. Due to compliance restrictions, we couldn’t record the session, but here are some key takeaways from our event.

First, let’s introduce John B. Emerson. An esteemed speaker and international relations specialist, John has over 20 years of experience with Capital Group International. He served as United States Ambassador to Germany from 2013 to 2017 and currently holds the position of Vice Chairman at Capital Group. With his deep expertise in international relations, the geopolitical landscape, and international trade, John offers a unique global business perspective to both the public and private sectors.

During the hour-long session, John discussed a wide range of current events, from U.S. and international elections to U.S.-China relations, providing invaluable insights into the dynamics at play in 2024 from both an economic and political standpoint. I’ll summarize three points that resonated with me the most.

2024: A Global Election-Palooza

John highlighted a political landscape that is in a state of flux with a large number of elections taking place across the globe. In the US, we have a rematch of 2020.  The presidential election is looking tight and will likely come down to close outcomes in four states: Wisconsin, Arizona, Georgia, and Pennsylvania. In addition, there are many factors that will impact voters over the next few months, including inflation and the potential impact of gas prices. The volatility of current events is causing nervousness among the public but those jitters have not reached the markets. Both the stock and bond markets are trading based on the strong economy, which is doing better than expected, as well as an optimistic interest rate outlook. Historically, market performance has often swayed voters’ decisions.

China and US relations seem to be thawing

I was personally excited to hear that the Giant Pandas will be returning to the National Zoo in Washington. This not only signifies a thaw in U.S.-China relations but also brings joy to families, including my younger son, who adores pandas. On a broader scale, this indicates a more favorable environment for trade, although it remains fragile. Congress continues to investigate Tik Tok due to data security concerns and is trying to prevent China from helping Russia’s military. It would take very little for these issues to spill over.

Politics and Your Investment Portfolio: Keep Them Separate

Despite the prevalence of negative news, John emphasized that good things are happening globally. Literacy rates are higher than ever, and extreme poverty is at its lowest. Our news outlets only seem to  convey the bad news, which has created a disconnect. We are surrounded by bad news yet investment markets keep rebounding and reaching new highs.  The truth is more nuanced but the historical data is irrefutable. Staying invested during up and down markets, during republican and democratic presidencies, is what builds wealth. Markets go up and down regardless of who is in office. If investors bought and sold based on their political beliefs, they may have sold out at the exact wrong time and never bought back in. Success with investments continues to rely on staying invested.

As always, the impact of these factors on your financial situation is unique. If you have any questions or concerns about how these developments may affect your portfolio, don’t hesitate to reach out to your adviser.