[Music in background]
[Animated glitches containing various letters flip to spell out the following financial terms]
On screen copy:
Bear Market
Business Cycle
Risks
Bull Market
Fixed Income
Inflation
Equities
Diversification
Interest Rates
Opportunities
Geopolitics
Market Catalysts
[Animated glitches end]
On screen copy:
Market Decode
On-screen disclosure:
Please read important information at the end of this program. Recorded on 3/05/2024.
[Lauren Sanfilippo speaking throughout]
While the elections in November might still feel a long way off, all sides agree a lot is at stake this year, for both the U.S. and the world. No wonder we're hearing from investors with concerns about managing risks as the date creeps closer.
On-screen copy:
Lauren Sanfilippo
Senior Investment Strategist, Chief Investment Office
Merrill and Bank of America Private Bank
Hi, I'm Lauren Sanfilippo, with some thoughts on keeping this election in perspective and separating actual risks from hype and noise.
On-screen copy:
Elections do matter, from geopolitics, to defense to global trade.
First, elections do matter and this one is shaping up as deeply contentious, with key issues at stake, from geopolitics to defense to global trade.
On-screen copy:
Elections often bring volatility, but it's usually short-lived.
Second, elections often do bring elevated market volatility. The good news is, this volatility is usually short-lived. Heated election cycles are nothing new, and they've never slowed the world's largest economy for long.
On-screen copy:
We believe company profits matter more than politics.
While politics can influence markets, company profits, which we believe are showing signs of reaccelerating, matter more.
So, how can you keep your goals on track amid the distractions?
On-screen copy:
Tips for keeping your goals on track
- Stay invested
- Diversify across asset classes
- Look for opportunities to add stocks
- Consider bonds for income
- Take the "long view"
First, stay invested and avoid risky attempts to "time the markets." Second, diversify across asset classes to help stabilize your portfolio when markets are volatile.
Third, if we do get some volatility, look for opportunities to add stocks at more attractive prices, guided by your long-term strategy. Fourth, consider looking to bonds as a source of stable income — such as U.S. Treasurys and high-quality corporate bonds — and also to dividend-paying stocks.
And, finally, take the long view and maybe a deep breath.
On-screen copy:
Between 1945 and 2023, stocks in the S&P 500
returned an annualized 11.4%.
Source: Bloomberg, 1945-2023.
Past performance is no guarantee of future results. It is not possible to invest directly in an index.
Between 1945 and 2023, stocks in the S&P 500 have returned an annualized 11.4%, with plenty of elections in between.
For more timely insights on the economy and the markets, be sure to read our weekly Capital Market Outlook. Thanks for watching!
On-screen disclosures:
Important Disclosures
The opinions expressed are as of 03/05/2024 and are subject to change.
Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results. It is not possible to invest directly in an index.
Asset allocation and diversification do not ensure a profit or protect against loss in declining markets.
Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the U.S. or abroad. Dividend payments are not guaranteed and are paid only when declared by an issuer's board of directors. The amount of a dividend payment, if any, can vary over time. Bonds are subject to interest rate, inflation and credit risks.
All sector and asset allocation recommendations must be considered in the context of an individual investor's goals, time horizon, liquidity needs and risk tolerance. Not all recommendations will be in the best interest of all investors.
Bank of America, Merrill, their affiliates, and advisors do not provide legal, tax, or accounting advice. Clients should consult their legal and/or tax advisors before making any financial decisions.
This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.
The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., ("Bank of America") and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S" or "Merrill"), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp.").
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[End of transcript]
"Heated election cycles are nothing new," says Lauren Sanfilippo, senior investment strategist for the Chief Investment Office (CIO), but "they've never slowed the world's largest economy for long." Here, Sanfilippo offers ideas for how to keep this year's elections in perspective, noting that while they often do bring elevated market volatility, it's usually short-lived. She also offers five steps for keeping your financial goals on track amid the potential distractions.