What should I be doing with my investments now that the President has been impeached?
Since September 24, 2019 when the Impeachment Inquiry was initiated, the equity markets have been seen relatively low volatility and the S&P 500 has gained 6.88%. This may be surprising given the voracious media coverage surrounding the House Impeachment on December 18, 2019, a mere 86 days since it began.
Why haven’t we experienced higher volatility and a market decline going into the vote? The reason can be easily understood by the graphic below (provided by the BBC):
Our equity markets tend to be a forward-looking gauge. Market participants have been well aware that the probable outcome that President Trump would actually be removed from office was very low. Impeachment by the House of Representatives doesn’t remove a sitting President. Only the Senate has that power and it takes 67% of the Senate to convict. Currently there are not 67 Democrats in the Senate.
Yesterday’s vote of Impeachment by the House is part one of a two-step process that was purposely designed by our founding fathers to have a check and balance system of power. Market participants projected forward to the end game since the first day of Inquiry and realized President Trump would not be removed. So, it has been business as usual as other forces have driven the market upwards.
Same question: What should I be doing with my investments now that the President has been impeached?
Without the removal of President Trump, market participants will continue to tune out the trial in the Senate.
If you have been concerned about the impeachment process having a material effect on your investments, we would recommend you move into the Christmas holiday season fully invested, bless that our founding fathers were guided with wisdom to plan for times as these and enjoy the celebration!