Election season is heating up. Over the coming months you’ll likely hear about one party being better than the other for markets. Or maybe one candidate will have greater odds of delivering the next market crash than the other. Or one candidate can better influence employment than the other. If you’re one of the few that believes this kind of stuff is knowable in advance (or matters), please speak up now or forever hold your peace.
In the spirit of the season, I’ve found something much more interesting. This is a letter written by President George HW Bush to President Bill Clinton on Clinton’s first day in the oval office. You might be surprised by what you read:
I think two things emerge from this letter that are far more relevant than trying to outguess our southern neighbours’ portfolios based on how they might vote.
First, in coming from different sides of the US political spectrum, the Presidents agree on a common goal: lead the country. Just like party politics, it’s easy to convince yourself that any one view is better than the others, particularly your own. And just like Republicans vs Democrats, investing has its debates too: value vs growth, passive vs active, new highs vs new lows and so on. The trick is to realize that all of these approaches work in their own way, on their own timing, in their own cycles, with unique efforts, for different people. In the long term, the purpose is all the same; keep leading, keep moving forward.
Second, it’s that sense of moving forward that’s so important to great leadership. The tenacity to stay on plan, not get bogged down by (inner/outer) critics, and resisting the urge to give in to detractors is leadership in a nutshell. Every tribe has its critics. A leader’s job is not to keep everyone happy, but lead on despite the unhappy. Managing wealth for yourself or others requires that same level of tenacity. Like Babe Ruth said, it’s hard to beat a person that never gives up.
As this election season rolls in, ask yourself not what your portfolio can do for you, but what you can do for your portfolio. Stay the course and don’t get caught up in election fever.