The economy is not the market - don’t panic
Guard against making any rash decisions during the frenzied election news cycle
How will markets react to the upcoming elections? Is your pension safe? These and many other headlines have been popping up in recent weeks as the media try to make sense of the current political uncertainty and our upcoming national elections. Fundamental to their question is the assumption that negative political news will influence the economy and that the markets will follow suit, leaving your retirement savings at risk. Speak to any market analyst and you will be told that the markets are not the economy and that there is very little, if any, correlation between the performances of the two. To understand that a bit better and to breathe easier before the May 8 elections, let’s look at the two concepts. The economy, as defined in the dictionary, is the balance between our production, trade and supply of money. The market is where we trade in stocks and shares for profit. It is not surprising that the two concepts are believed to be closely related and that the one would influe...
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