Are Politics Influencing Your Investment Decisions?

Many wealth management firms, particularly those serving high-net-worth clients, can become entangled in political intrigue when designing retirement plans or constructing investment portfolios.

• Who’s in the White House?

• Which party controls Congress?

• What new tax bill might pass?

• Will new regulations negatively impact my current investments?

At Heritage Capital, LLC, we see things differently. If your investment strategy depends on political policy, you’re probably focusing on the wrong driver. The real force behind a substantial part of market movement isn’t POTUS; it’s the Federal Reserve. 

As a fee-only financial advisory firm in New Haven, CT, we focus on the data and minimize drama when recommending investments. 

In this article, we’ll explore why the Fed, and not the political soap opera, is more important in shaping your portfolio’s direction, how presidential influence on markets is limited, and how we use a disciplined, research-driven approach to support long-term retirement planning for high-net-worth individuals who want evidence-based investment strategies in the future.

1. If you’re worried about politics, you’re missing the point

Many investors worry about the outcomes of elections, regulatory shifts, or changes in tax law. Those concerns are understandable in long-term retirement planning, especially if you have substantial assets that create complex tax and estate situations. 

But here’s the truth: market movements are driven far more by interest-rate policy and monetary dynamics than by who occupies 1600 Pennsylvania Ave.

If you base your strategy on political headlines, you risk reactive behavior rather than proactive positioning. It pays to remember that if it is in the news, it has already happened, and the markets have already reacted. 

For clients in Connecticut, whether in New Haven, Fairfield, or elsewhere, this can lead to unnecessary turnover based on emotional investment decisions driven by noise rather than data, with long-term consequences. As a fee-only financial advisor, I emphasize stability and staying focused on long-term goals, rather than sensationalism.

2. The President can’t impact markets in a direct way

It’s tempting to believe that a President’s tax cuts, trade policies, or regulatory agenda will determine how stocks behave. But the facts tell a different story:

• Stock markets have historically performed well across multiple presidencies, parties, and policy frameworks.
  
• Market participants factor in numerous variables, including anticipated policy shifts, inflation data, earnings, and, most importantly, interest rate expectations.
  
• The President does not set monetary policy. That falls to the Fed.
  

With decades of experience in equities, options, futures, and fixed income, our Heritage professionals focus less on who is in office and more on data, sentiment, trends, and the next Fed meeting. 

Suppose you’re considering switching financial advisors due to poor results in various market conditions. In that case, this perspective may offer a more straightforward path: look for an advisor who tracks the drivers, not the drama produced by the securities markets.

Watch our founder, Paul Schatz, discuss tariffs.

3. The Fed is the engine; the President is a spectator

The Federal Reserve is responsible for setting the tone for interest rates, liquidity, and inflation expectations; the fundamental levers that move markets. For example:

• A dovish Fed stance (lower rates, quantitative easing) tends to fuel assets that generate risks, particularly stocks, businesses experiencing faster growth, and even real estate. However, that’s not a guarantee, and it doesn’t happen all of the time. There can be other factors at play.
  
• A hawkish Fed (raising rates, shrinking earnings) often triggers defensiveness, a movement out of equities and into alternative investments.
  

Our research and commentary frequently highlight this dynamic. For example, in recent posts, I’ve emphasized that a Fed pause or pivot is more relevant than discussing tariffs or election outcomes.

For retirement planning in Connecticut and beyond, this distinction matters. Clients aren’t looking for speculation on policy; they’re looking for a steady plan that can pivot based on the Fed’s signals, so they don’t have to change their advisor every time the news is describing risk versus reward

4. Heritage’s process: dissect the data, be responsive to the markets

At Heritage, we don’t have a crystal ball that accurately predicts future outcomes. Our process is firmly anchored in empirical data, both historical and current. In other words, we don’t follow the crowd. To build a loyal following, we monitor and respond to how markets behave, not what commentators and pundits say. 

Our approach includes:

• Tracking key Fed announcements and quantitative metrics.
  
• Monitoring flow indicators, breadth of market participation, sector rotation, and risk-off signals.
  
• Adjusting portfolios proactively: when momentum falters, we reduce risk; when breadth widens and the Fed leans dovish, we increase our clients’ exposure to stocks.
  

This is particularly relevant for high-net-worth individuals and retirees needing disciplined investment advice. Whether you need retirement planning in Connecticut, are changing financial advisors, or are seeking a fee-only financial advisor in New Haven, CT, we offer a disciplined investment process grounded in data, not emotion.

With over 30 years of recommending active investment management disciplines along with comprehensive financial planning, we’ve been assisting clients in retiring with a greater sense of confidence and security. That kind of longevity isn’t built on chasing political headlines; it’s built on aligned focus and consistent execution.

5. What this means for you

Switching financial advisors or seeking a fee-only firm (paid by clients and not third parties to sell their products) and a fiduciary (the highest ethical standard in the financial service industry) is a significant move in the right direction, especially as your wealth grows and becomes more complex.

If you are tired of an advisor reacting to daily news, consider one who focuses on the underlying market mechanics. 

Here’s what you should ask:

• Does your current financial advisor track the Fed and interest-rate signals, or focus on political sound-bites?
  
• Do they adjust portfolios based on data (breadth, momentum, risk-off signals) or simply increase exposure because “the election turned out well”?
  
• Do they offer clear communication around process and decisions, as a true fee-only fiduciary would?
  

The cost of chasing politics can be steep: emotional trades, increased risk, and opportunity cost. As a process-driven advisor, we aim to reduce those costs and help you focus on what matters: your long-term goals, tax planning, estate strategies, and portfolio alignment.

About Heritage Capital

In the world of financial planning and legislation, the noise is constant. Tax reforms, trade wars, and election results; they all grab headlines. However, the more relevant headline for your portfolio is often “Fed holds rates” or “Fed signals a cut,” against the backdrop of strong and/or improving data.

At Heritage Capital, our mission is clear: we let the data lead the narrative, so your portfolio doesn’t become a prisoner of political infighting. Suppose you’re assessing retirement planning in Connecticut, exploring the option of switching financial advisors, or searching for a fee-only financial fiduciary advisor in New Haven, CT. In that case, we invite you to consider a different lens where the macro-driver matters more than the daily drama.

Connect with us today to learn more about our investment management processes.