The Election Results Are In

The election results are in. What does it mean for your investments?

Absolutely nothing.

Let me explain.

Before every election, there are always strong words thrown around that the opposing party will 'cripple the economy'.

A crippled economy normally comes hand in hand with negative stock market growth.

So, the Labour party has won a landslide victory - what will happen to the economy this year or next?

Nobody knows.

I have graphed the UK GDP growth since 1948 and shown which party was in power.

From this graph we can infer:

• The UK economy generally grows.

• Recessions happen irrespective of the political party in power.

The reality is that the party in power has very little impact on the economy.

The UK is an open, capitalist society and neither party is planning to change that.

This environment encourages industrious humans to innovate and reap the rewards of their work which generally drives economic growth.

Of course, politics is important to everyday life, and everyone should make the effort to understand each party's policies and vote.

But, when people tell you that this or that party will crash the economy or that the stock market will go up or down because of X, Y, or Z, remember that they have no idea what will happen.

These people are paid to make noise, they are not paid to be correct.

If they were paid to be correct, they would promptly change their message. 

To build wealth from the stock market you should ignore the news and invest as much as you can in a broad, global index. 

History has shown that while capitalism persists and people are rewarded for their hard work, the stock market will continue to go up over the long term.

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