Warren Buffett once told a national television audience, “If you mix your politics with your investment decisions, you’re making a big mistake.”
“I have seen people make economic decisions based on their political feelings and it’s not the way to do it,” the legendary investor cautioned.1
However, after a contentious 2024 election cycle, that appears to be exactly what is happening so far in 2025. We see it in the outlook for both inflation and consumer confidence.
“Therefore everyone who hears these words of mine and puts them into practice is like a wise man who built his house on the rock,” Matthew 7:24
As you can see from the accompanying illustrations, a person’s political affiliation has an influence on their outlook regarding how the economy will evolve in the months ahead. Outside influences can cloud your judgment and lead to emotion-driven decisions that may not be in your best interest.
One Thing Leads to Another?2,3
When it comes to investing, being too optimistic or too pessimistic can lead to hasty decision-making…
UMich.edu, January 2025. ApolloAcademy.com, January 2025. Median 1-year inflation outlook by self-reported political affiliation. Each monthly survey contains approximately 50 core questions and gets feedback from a minimum of 500 interviews by telephone.
…so, knowing a bit about the benefits and limitations of human nature might help make you a better investor.
UMich.edu, January 2025. en.MacroMicro.e, January 2024. The question was: “Generally speaking, do you usually think of yourself as a Republican, a Democrat, an Independent, or what?” Each monthly survey contains approximately 50 core questions and gets feedback from a minimum of 500 interviews by telephone.
As the charts show, sometimes our own bias can be our worst enemy, and result in us drawing conclusions about what lies ahead.
So, if you’re struggling a bit to find a balance these days, please let us know. We created your investment strategy based on your goals, time horizon, and risk tolerance. Sometimes a quick review can help make you feel a bit more comfortable.
- CNBC.com, February 27, 2017
- ApolloAcademy.com, January 2025
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en.MacroMicro.e, January 2024
