The Charlie Brown Problem With Election Predictions
Every election cycle, I think about Charlie Brown. Specifically, I think about how in those classic Peanuts specials, you never once heard an adult speak in a way that made any sense. It was just noise. Muffled, indecipherable noise.
That is exactly what I see when I turn on financial media around midterm elections. Headlines screaming that a Democratic sweep could “rock the stock market.” Pundits declaring with absolute certainty what will happen to your 401(k) depending on which party controls Congress. It is noise. Pure noise.
I actually did the homework on this, so you don’t have to.
What the Historical Data Actually Shows
President Trump could be the eighth president in history to lose both the House and Senate to Democrats. I looked up what happened to the S&P 500 when that scenario played out historically, going back to 1954. Here is what the data says:
- One month later: Up 2.1% on average, six out of seven times
- Three months later: Up 10.7% on average, seven out of seven times
- Six months later: Up 17.5% on average, seven out of seven times
- One year later: Up 15.5% on average
Now here is the part most advisors won’t tell you. I just shared that data, and I am going to follow it up by saying it doesn’t mean a thing. Not a darn thing. Markets could absolutely get rocked regardless of what history suggests. Anyone who tells you they know with certainty what happens next is selling you something.
The Only Constant That Actually Matters
At Markowski Investments, we don’t try to guess what we cannot guess. What we do is stay consistent based on what we know to be true, what has worked over long periods of time, and what holds regardless of which administration happens to be in power.
Here is what I know to be true right now. Whether Democrats sweep or not, government spending is going to keep growing. There is no realistic path where that changes in a meaningful way. And when government spending grows, more money gets printed. Full stop.
What does that mean for you? It means:
- Wages will not keep up. They haven’t, and they won’t.
- The purchasing power of your salary is quietly being eroded while you grind away at work
- Working harder and longer is not, by itself, a sufficient financial strategy
You Cannot Run the Marathon of Wealth on Legs Alone
My son just ran his first New York City Marathon and finished in under four hours. I could not be more proud. But I want you to think about something. The guy who won that same marathon ran 26.2 miles in roughly two hours and two minutes. Both men ran the same race, on the same course, at the same time. The difference in outcome was staggering.
That is what the gap looks like between someone who only relies on their salary and someone who puts their money to work intelligently. You can run as hard as you want. You can log the hours. But if your only financial engine is your paycheck, you are competing against people whose capital is working for them around the clock.
Being prudent with your money is not optional in this environment. It is survival.
Tune Out the Election Noise
Here is my bottom line. The midterm elections are not going to save your financial future, and they are not going to destroy it either. What matters is having a consistent, disciplined investment strategy that does not depend on which party controls the House or Senate.
- Ignore media headlines designed to trigger emotional decisions
- Understand that monetary inflation is a long-term structural reality, not a temporary blip
- Focus on assets and strategies that have historically preserved and grown wealth through multiple administrations and economic cycles
- Accept that your salary alone is not enough, and your money must work as hard as you do
The pundits on television are the adults in a Charlie Brown special. Lots of sound, zero signal. Turn down the volume and focus on what actually works.