Q3 2024 Quarterly Edge: Politics play no role in your portfolio - The market doesn’t care who is president

Blue Chip FM

Watch the full video episode on YouTube here!

With the presidential election coming up, what does that mean for volatility in stocks? We believe that politics don’t cause volatility in the market: uncertainty does.

Welcome to a special Quarterly Edge episode of Blue Chip NOW!, where Chief Investment Officer Daniel Dusina CFA® and Managing Partner Dan Seder CFA®, CMT, CFP® share their outlook for the financial quarter ahead. In our conversation, we discuss trends in the equity market, the influence of the presidential campaign, and why investors need to adjust their expectations. Discover what the future holds for fixed-income investments, why bonds remain a smart choice, key AI investment insights, valuable strategies to prepare for market volatility, and more!

If you read our analysis of stock market returns in U.S. presidential election years, you will recall that elections in and of themselves have no observable impact on calendar year performance.

Returns experienced by investors in U.S. markets in Q2 2024 were meaningfully different than those seen in the first quarter. In Q1, the S&P 500 Index provided a double-digit return, the average S&P 500 stock advanced at a high-single-digit clip, and bond market returns ended in negative territory. In Q2, the concentration of returns seen in 2023’s equity market was again evident. Specifically, the S&P 500 Index posted a mid-single-digit return, but the average S&P 500 stock settled firmly in the red. The bond market found a bottom and charged higher before it ultimately ended the quarter flat. With two quarters of starkly different performance profiles thus far in 2024, what should be top of mind for investors in Q3 and beyond?

Tune into this week’s episode on BlueChip FM to find out what Blue Chip Partner’s Chief Investment Officer Daniel Dusina, CFA thinks should be top of mind for investors these next 90 days.

Key Points From This Episode:

(0:00:14) Hear a breakdown of and outlook for the equity market.

(0:03:47) Learn about the dynamic nature of financial markets.

(0:04:38) Unpack the impact of the markets on the value of bonds.

(0:08:12) Implications of the rising popularity of AI for investors.

(0:13:45) Creative ways to leverage the value of AI as an investor.

(0:15:54) Final takeaways and reasons to be optimistic for the future.

Quotes:

“I do expect volatility to arise [in the equity markets] this summer.” — Daniel Dusina [0:00:33]

“We have seen a market run, weakening economic data, and a very polarized election that is coming up. That points to volatility.” — Daniel Seder [0:02:59]

“I think people need to be aware of how quickly and how technically unsubstantiated some of the value creation [in AI] has been.” — Daniel Dusina [0:12:05]

“You would expect that if the artificial intelligence boom continues that companies should be able to increase margins meaningfully down the road.” — Daniel Seder [0:15:19]

Links Mentioned in Today’s Episode:

Does a U.S. Presidential Election Impact Stock Market Performance?’: https://www.bluechip partners.com/blog/does-a-u-s-presidential-election-impact-stock-market-performance/

Q2 Quarterly Edge Episode: https://bluechipnow.libsyn.com/site/q2-quarterly-edge-economic market-outlook-on-stocks-bonds-and-investing-ideas-for-2024

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