In recent months, events like trade talks between the U.S. and China, the Federal Reserve announcing interest rate cuts, and impeachment proceedings in Congress have led many investors to fret over the future performance of the stock market.
Despite the drama in the news, though, the S&P 500 on October 28 hit a record high.
Just how much do you have to worry about whether what's going on in Washington will affect your portfolio? Here's what the experts say.
Currently, much of the news cycle is dominated by Congress pursuing an inquiry to decide whether or not to pass articles of impeachment against President Trump. The Federal Reserve may also announce further interest rate cuts, and there's the chance that the U.S. could strike a truce in the trade war with China.
There are lots of questions here that won't necessarily get answered soon, and it's true that the stock market usually doesn't react well to uncertainty. But the average investor can rest easy, experts say.
There hasn't been much of a reaction to the House's investigation yet, for example. "The market hasn't really reacted to the impeachment news," says Tom Martin, senior portfolio manager at Globalt Investments. "It's been a nonissue for the market."
Video by Jason Armesto
Depending on what the impeachment process brings to light, the market could react more strongly. "The more uncertainty you have with the outcome with regard to the impeachment and to the election, the market's not going to respond well to that," says Willie Delwiche, investment strategist at Baird.
Throughout this year, though, after the market has tumbled, it has rebounded. And in the short term, it's normal for stock prices to an fluctuate. All the same, the 90-year average for the S&P 500-stock index, an index generally considered to be a benchmark for overall market performance, is 9.8% a year.
The best thing you can do is to stick to your financial plan — do your best to tune out the news cycle and stay consistent when it comes to saving and investing.
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