In this newsletter, I share content I bumped into the past month that’ll help you become more financially savvy.

This is not financial advice; it's just education. Please think through your situation before applying anything you read here.

This month's recommendation:

Should You Invest Based On Politics?

Commentary

With the US elections coming up, you'll probably hear people talk about how political parties will determine the fate of the economy.

"If this person wins, our economy will tank! I'm leaving the country if they win! I hate that person!"

What if we invest with this mindset?

What if we only stay invested in the stock market while our political party of choice is in power, then sell everything and stay in cash when the opposition is in power?

The chart above shows that your party of choice doesn't matter over the long run. Staying invested all the time will be much more profitable than only investing when your political party is in power.

Why is it rare for a politician to single-handedly ruin an economy?

Because in a capitalist society, businesses will always do their best to make more money.

Do McDonald's executives work less just because a Republican is in power? Obviously not! They will still try to sell as many burgers as possible because that's how these executives get promoted and get bonuses!

Over the long run, most political issues won't matter for the stock market.

Individual business managers are incentivized to increase profits regardless of what's happening in politics.

As business owners via stock market investments, we can benefit from this pressure to perform by continuing to hold our investments over the long run.

KEITH LIM