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Letter from Stash CEO

November 07, 2016
election

3 min read

Dear Stasher,

Presidential elections can cause a lot of market noise. Particularly this one. It’s hard to tune it all out – whether you’ve been investing for 30 years or you signed up for Stash yesterday. Let’s take a moment to discuss this noise so that you’ll be prepared for whatever happens to the stock market as the election results come rolling in, and in the weeks that follow.

You might be thinking, “Why is he writing this before the election results are in?” The answer is simple:

My advice will be the same either way.

I’ve been an investor for almost two decades. Let me share a dirty little secret with you… ready for it? Nobody knows what’s going to happen tomorrow or in the weeks to come.

The political media frenzy has been driving the markets wild for the past week. The US equity market traded down for nine consecutive days, but at the time of this writing, today’s gains have almost fully erased last week’s losses. And even after the election, the market will still need time to figure out how each candidate’s policies will affect the economy.

Despite periods of volatility, the US equity market has averaged +10% a year over the last 70 years. Markets certainly don’t grow every year, but over the long term, the American economy has grown even in the face of depressions, recessions, and wars. This is exactly why successful investors follow a set of core principles, and why they root themselves in these core principles for the long term.

The Stash Way is a term we have coined for these principles, but we certainly didn’t invent them. All we did was take the core components of a successful long-term investing strategy, and make them easier for you to implement:

If you’re tempted to change your investing strategy, think again.

Will the market will go up or down?

Yes. It may go up, it may stay flat, or it may go down. It may even do all three, all month long. The key for you is to continue doing the same thing you always do and focus on the long term. Keep it simple and remember The Stash Way.

Don’t do anything special on Tuesday or Wednesday.

Continue to invest on a regular basis, whether the market goes up or down. With Stash, you don’t need to have a lot of money to continue building your portfolio. Set up Auto-Stash to invest what you can afford on a regular basis.

You will probably hear the word volatility in the news.

Volatility is the movement of an asset, or the entire market, made worse by large buying or selling in a very short period of time. Think about it, people may be thrilled or devastated by election results and react at the same time. This creates volatility. Long-term investors should be focused on three, four, or even eleven presidential cycles.

And one final question… Brandon, what are you going to do?

Stay the course. That’s my answer. I have a weekly Auto-Stash set up into my mix, and I’m going to continue building my Stash for the long term.

This is the exact reason that I quit my previous job to start Stash with my team — so a quarter of a million customers could get access to the markets and start investing toward their long-term goals.

This may be a big week for politics, but it should not be a big week for you as a long-term investor. Take a long view, no matter what happens. It’s less stressful that way, and it benefits you.

Your long-term investing goals should outlast even a two-term president.

Keep Stashing,

Brandon Krieg
CEO – Stash

By Brandon Krieg
Brandon Krieg is the CEO and co-founder of Stash.

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