Beyond The U.S. Election: Positioning Your Portfolio To Overcome Political Noise

Summary The S&P 500 historically delivers strong post-midterm election returns, but near-term performance may lag as political uncertainty rises. A divided government with a Republican president and Democrat Congress has averaged weaker 7% annual S&P 500 returns, prompting consideration of portfolio diversification. I remain long the S&P 500 but am allocating new capital toward alternatives like bonds, gold, and especially large-cap European equities. European equities, supported by robust earnings growth and lower correlation to U.S. stocks, present a compelling substitute for new equity exposure. This idea was discussed in more depth with members of my private investing community, CEF/ETF Income Laboratory. Learn More » halbergman/iStock via Getty Images Main Thesis & Background The purpose of this article is to discuss the broader market backdrop with a focus on how the upcoming US midterm elections might impact large-cap US equities (as measured by the S&P This article was written by The Worker's Advocate 9.74K Followers Follow I have worked in Financial Services for over 15 years. I have a Bachelors in Finance, where I was a scholarship Division 1 athlete (tennis). After working in NY for three years, I relocated to North Carolina for my MBA and I am fortunate to split my time between Charlotte & Asheville.I keep my portfolio up-to-date and take pride in writing about funds, stocks, and sectors I actually invest in. I know my followers appreciate this approach.My strategy: Invest in quality, diversify, add at the right times, and focus on the long run. Chasing risk, trying to get "rich" quickly, or following advice you don't understand are all pitfalls I made. That experience was a great teacher and I hope to help others learn what I have along the way.Broad market: DIA, VOO, QQQM / TDIV, RSPSectors/Non-US: XLE / IXC; VPU; FEZ, SCHF, BBCA, FLGB, EWJ, EWYMetals: CEF, SGOL, SLV, XMEStocks: JPM, MCD, WMT, MAA, WMDebt: Municipal bonds from NCI also contribute to the investing group CEF/ETF Income Laboratory where I specialize in macro analysis. Features of CEF/ETF Income Laboratory include: managed income portfolios (targeting safe and reliable ~8% yields) making use of high-yield opportunities in the CEF and ETF fund space. These are geared toward both active and passive investors of all experience levels. The vast majority of holdings are also monthly-payers, for faster compounding and steady income streams. Other features include 24/7 chat, and trade alerts. Learn more. Analyst’s Disclosure: I/we have a beneficial long position in the shares of RSP, VOO, FEZ, SCHF either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.