From the economy and earnings growth, to valuations and the fed, there are more impactful factors in the market than politics, explained Raymond James CIO Larry Adam to Yahoo Finance Executive Editor Brian Sozzi on Opening Bid. In fact, Raymond James ranks politics low in their own framework, so it's no surprise that Adam says there are more important things that 'dictate where the equity markets go than who was sitting in the White House.'
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One of the biggest mistakes, I believe that investors make, is trying to alter their portfolios based on who is going to win. And I'll just give you two quick examples that when President Trump was elected, what sector did everybody tell you had to be in? It was energy, right? Drill, baby, drill. Well, guess what? If you went over his four-year term, energy was the worst performing sector by a wide margin. What sector did everybody tell you to avoid when President Trump came into office? It was technology. And guess what? Technology ended up being the best performing sector. Fast forward to President Biden, the sector that everybody told you to avoid, energy, renewable, the Green New Deal, well guess what? Energy by far and away is the best performing sector so far under the Biden administration. The sector that everybody told you to get into, consumer discretionary because of universal income, all the spending. Guess what? That is the worst performing sector. So my point is that if you were to look at our equity framework that we look at, we have 10 different factors. Politics ranks number eight in importance. There's far more important things like, how's the economy, earnings growth, valuations, sentiment, what the Fed's doing. Those by far and away are going to dictate where the equity markets go, then who is sitting in the White House.
