Not surprisingly, just as Presidents Obama and Bush did before him, Trump is anxious to complete as much of his legislative agenda as possible before the mid-term elections. While this is pragmatic, it goes counter to traditional 4-year election cycle theory which advocates making the tough spending choices in the first two years, in order to then spend to achieve maximum growth heading into the next presidential election. If the US economy is still growing in 2020, it will be the longest economic expansion in over 100 years. Equally, if the bull market in stocks continues without a down year, it too will break the previous record (1991–2000) by three years. While these scenarios are certainly not impossible, we think they make for a potentially challenging presidential election year for the incumbent in 2020.

This article was written by Rod Smyth, Chief Investment Strategist, and Kevin Nicholson, Chief Market Strategist, at RiverFront Investment Group, a participant in the ETF Strategist Channel.

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Past results are no guarantee of future results and no representation is made that a client will or is likely to achieve positive returns, avoid losses, or experience returns similar to those shown or experienced in the past.

RiverFront’s Price Matters® discipline compares inflation-adjusted current prices relative to their long-term trend to help identify extremes in valuation.

Technical analysis is based on the study of historical price movements and past trend patterns.  There are no assurances that movements or trends can or will be duplicated in the future.

Strategies seeking higher returns generally have a greater allocation to equities.  These strategies also carry higher risks and are subject to a greater degree of market volatility.

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RiverFront Investment Group, LLC, is an investment adviser registered with the Securities Exchange Commission under the Investment Advisers Act of 1940. The company manages a variety of portfolios utilizing stocks, bonds, and exchange-traded funds (ETFs). RiverFront also serves as sub-advisor to a series of mutual funds and ETFs. Opinions expressed are current as of the date shown and are subject to change.  They are not intended as investment recommendations.

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