Stay invested in the market regardless of politics: Strategist

As the 2024 election season heats up with this week's Republican National Convention, many on Wall Street debate how the build-up to and ultimate outcome of the election will impact markets (^DJI, ^IXIC, ^GSPC).

LPL Financial chief equity strategist Jeff Buchbinder joins Market Domination to share how best investors should be taking in all the political whirlwinds, including the attempted assassination attempt on former President Trump this past weekend which pushed markets higher, in order to make wise investments.

"Even though we have thought for a while that stocks are a little bit expensive, we have remained fully invested. That's been our recommendation, we're neutral on equities... the numbers here are very compelling, in terms of staying invested," Buchbinder tells Yahoo Finance. "So certainly there were some Democrats that missed out on gains during the Trump presidency before. There's certainly, the opposite as well. So, yeah, staying invested, the stock market goes up something like 78% of the time. Staying invested over the long haul makes a lot of sense. It's very unlikely that you're going to get declines over any meaningful period of time."

Buchbinder and LPL Financial remain neutral on equities

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Nicholas Jacobino

Video Transcript

And a great day to have you on Jeff.

You know, and maybe we'll start in the politics, Jeff because listen, you heard Julie and I chat in there, there's just a lot going on Republican national convention that starts tonight, Jeff.

Of course, there's terrible events over the weekend, the attempted assassination of former president Trump reports.

Um, that Trump is gonna pick his running mate today, Jeff try to help us walk through as a strategist.

Jeff.

How you're trying to make sense of all that, what it means for the markets?

What are you telling clients?

Yeah.

Well, first thanks for having me on.

Um, you know, I, I think the, the key message for clients right now is, is be patient, right?

We've had just such a huge run.

Uh, and, uh, to us that don't your research, it looks like socks might be a little bit ahead of themselves.

So that's kind of high level, you know, wait for a pullback potentially by a dip.

Maybe we get a dip around election uncertainty, maybe it's a geopolitical threat.

Uh We'll have to see but that, that's our, our first message in terms of the, uh, you know, the Trump trade, which is certainly getting a lot of, uh, attention today.

Uh, certainly it makes sense for the, uh, for the energy sector to do.

Well, it makes sense for defense, uh, to do.

Well, that's another one makes sense for the dollar to rally.

Right.

It makes sense for yields to go up and the yield curve to steepen.

We're talking about tariffs and we're talking about deregulation, the banks certainly, uh getting a little bit of a lift from that Trump rate.

So you guys are talking, I think about all the right things.

Uh those are certainly areas investors can look at.

Um, if they want to try to position around a potential Trump victory.

When you talk about patience though, Jeff, I think it's important to point out and this is something you pointed out in a recent note that people should stay invested.

In other words, just because you don't necessarily like one candidate or the other is not a reason to pull out of the market because you think there's going to be a pullback.

And you had a chart that showed if you hadn't, if you had stayed unvested during say Democratic administrations or Republican administrations, you would have missed out on an awful lot of market upside.

Yeah.

That's right.

That's, uh, from our mid year outlook that we recently published, uh, certainly staying invested over the long term makes sense.

You know, even though we have thought for a while, that stocks were a little bit expensive.

Uh We have remained fully invested, that's been our recommendation.

Uh We're neutral on equities and uh it really takes a lot to move us much off of that.

Uh The uh the numbers here are very compelling in terms of staying invested.

So certainly there were some Democrats that missed out on gains during the Trump presidency before.

There's certainly uh the opposite as well.

So, um yeah, staying invested, the stock market goes up, something like 78% of the time staying invested over the long haul makes a lot of sense.

You're very, uh it's very unlikely that you're gonna get declines over any meaningful period of time.

Jeff, did I hear you just say you were, you were neutral on equities?

That's right.

Yeah.

Why is that?

Why is that Jeff?

Sure.

Well, first, um you know, the earnings environment is pretty good.

Um We're probably gonna get a double digit earnings growth number in the second quarter in the first quarter when, uh I'm sorry, the second quarter when the numbers are all in uh over the next uh five or six weeks.

Uh So that's one second.

Um We use technical analysis as an important part of our process and the momentum is certainly very, very strong and that suggests uh staying with this market and then, you know, we are about ready to get to a fed rate cut.

And um you know, if the economy holds up, it's slowing.

But if it holds up, uh, there's a good chance that, you know, we see some more gains here, uh, over the next several months.

Despite the fact that markets tend to pull back in the second half, whether it's an election year or not, whether it's a good year or not, you do tend to see somewhere around, let's call it 7 to 10% drawdowns in most years.