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Chart of the Week: Politics and Portfolios—a Mismatch

November 14, 2022

As much as politics and policy matter, election results make for poor inputs into your investment decision-making process for your portfolio. Wins and losses in the political arena don’t really carry over to investment market outcomes. 

If you find that surprising, this week’s chart shows a simple but powerful statistic on how U.S. companies factor election results into their earnings projections—or don’t.

According to data purveyor FactSet, executives at just 18 (or only 4%) of the 401 companies in the S&P 500 mentioned the word “election” in their third-quarter earnings conference calls between Sept. 15 and Nov. 3. This is on par with past midterm election cycles.

If the biggest companies in the country (and the world, in some cases) find it unnecessary or irrelevant to address the election when setting shareholder expectations, I’d suggest that investors follow suit and avoid mixing politics with portfolios.

Note: Chart shows number of companies that mentioned or did not mention the election in their earnings conference calls between Sept. 15 and Nov. 3, 2022. Source: FactSet.

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