Long-Term Investing and Elections

March 25, 2024

In this episode of the Runway Decade Podcast, hosts Bill Bush and Brother Pete delve into a variety of intriguing topics ranging from personal anecdotes about their recent feature in Cigar Aficionado Magazine to detailed insights on investment strategies, particularly in the face of a presidential election year. Their discussion transcends the excitement surrounding the 150th running of the Kentucky Derby, extending to the significance of maintaining a diversified investment portfolio and the impact of election cycles on market performance.

Episode Highlights:
  • 00:00:02.: Bill offers a lively introduction to the episode, emphasizing the podcast's theme with a metaphorical "cleared for takeoff" message that sets the tone for an engaging discussion on investments, personal experiences, and the anticipation surrounding the Kentucky Derby.
  • 00:00:23: Brother Pete warmly greets listeners, expressing excitement for the year 2024 and the immediate event on their calendar - the 150th Kentucky Derby, setting the stage for a blend of personal experiences with broader economic and investment insights.
  • 00:00:40: Pete shares anecdotes about receiving messages from friends who saw them in Cigar Aficionado Magazine, linking personal interests and public recognition with the traditions of the Kentucky Derby, creating a relatable entry point for listeners tuned into the episode.
  • 00:01:16: A memorable moment with their mother is shared as they talk about taking her to the Kentucky Derby, which has been a long-held dream of hers. This personal story seamlessly transitions into discussing the Derby as a bucket list event, highlighting the familial and emotional significance behind their investment in the event.
  • 00:02:39: The conversation pivots to investment themes, where humorously, the Derby is ruled out as a good investment theme but is recognized as a source of fun and a life experience worthy of one's bucket list, highlighting the balance between financial investments and investing in life experiences.
  • 00:03:24: Bill and Pete tackle the concept of recency bias in investment psychology, emphasizing how investors' recent memories can disproportionately influence their expectations for the future, leading into a broader discussion on how to approach long-term investing with a level head.
  • 00:04:15: Insights into market trends and the importance of staying diversified in one's investment portfolio are detailed. The Bush brothers discuss the fluctuating nature of investment returns and the importance of hedging bets across various asset classes.
  • 00:06:01: They break down the statistical likelihood of experiencing positive vs. negative years in the stock market, reinforcing the value of patience and a long-term perspective in investing, supported by historical data to ease the concerns of jittery investors.
  • 00:07:40: The episode then segues into discussing the anticipation and uncertainties surrounding the presidential election year and its potential impacts on the investment landscape, injecting a timely thematic element linked to the broader socio-political environment.
  • 00:09:32: Importantly, they expound on how fear and uncertain events often lead investors to move towards safer assets, but remind listeners that historically, staying invested or continuing regular contributions has often yielded better outcomes than reacting to immediate uncertainties.
  • 00:10:21: Interest rates and their influence on investment decisions, especially in a high-interest rate environment, are addressed, suggesting how current economic conditions might shape investment strategies differently than election anxieties alone.
  • 00:12:09: The Bush brothers contemplate the uniqueness of the upcoming election, potentially seeing incumbent figures from both major political parties vying for the presidency, stressing the market's preference for certainty over uncertainty.
  • 00:16:15: They conclude the investment discussion with a reflection on the minimal long-term impact of election results on solid investment strategies, reinforcing the importance of staying the course and adhering to one's investment plan regardless of political climates.
  • 00:19:04: The episode wraps up with Bill providing contact information and encouraging listeners to explore more resources, making a smooth transition into concluding remarks that books end the podcast with practical advice and ways to engage further with their content.
Key Takeaways
  • Investing in life experiences like the Kentucky Derby can be just as valuable as financial investments, enriching one’s quality of life alongside a robust investment portfolio.
  • The concept of recency bias and its effect on investment decisions underscores the importance of maintaining a long term perspective, staying diversified, and resisting the urge to make rash financial decisions based on recent events.
  • Historical market performance data reinforces the value of patience in investing, with positive market years outnumbering negative ones and the long-term trend favoring those who stay invested.
  • Political climates and election cycles can introduce volatility and uncertainty in the short term, but they have minimal impact on well-structured, long-term investment strategies.
  • Regardless of the socio-political environment, adhering to a carefully planned investment strategy based on one's financial goals and timelines remains the best course of action.

Tweetable Quotes:
  • "In our industry, fear is often equated with cash. But that much fear rarely serves well in the long run." - Bill Bush
  • "The market likes certainty. Uncertainty breeds volatility, but long-term investment strategies can weather the storm." – Brother Pete
  • "If your plan has not changed, there’s no need to overhaul your investment portfolio. Let your goals guide your investment decisions." - Bill Bush

Resources Mentioned:

The Runway Decade