Civic engagement is great, as is heated debate over strongly held political views. This is befitting of a free country. However, as we enter a new election season, we should remember that investing according to our politics usually ends badly.
We have good data from the University of Michigan about how our political beliefs impact our perceptions. For more than 75 years they have been monitoring trends in consumer sentiment. What the data shows is that party stalwarts have the least accurate perceptions of national sentiment among all citizens. Put another way, "national estimates have historically been, and remain, fully aligned with estimates based on independents alone." *
I share the frustration of my fellow Americans with the lack of progress being made against many of our greatest and most agreed-upon national challenges. It has always been so. The Founders lost confidence in the quality of our elected officials before the end of the eighteenth century. My favorite quote comes from George Washington, although many similar observations can be found among the writings of Jefferson, Franklin, Madison, and many others.
By 1799, according to Washington, partisan politics had so corrupted the Revolution that either party could "set up a broomstick" with a party label and it would "command their votes in toto!" I take solace in the knowledge that the Republic has survived and even flourished since then. **
Washington's disappointment must have been greater than ours. The Founders pledged "our Lives, our Fortunes, and our sacred Honor." Indeed, many paid the ultimate price for their convictions. The stakes are far smaller for us but still significant. ***
Partisan impulses are usually greatest during presidential elections. Nonetheless, I believe that the markets are positioned to deliver above-average volatility as November approaches. Billions were lost in March when investors panicked over tariffs. The smart money stood pat or took advantage of the panic. Extreme leverage in today's markets and rapid investment in AI infrastructure leaves many investors even more vulnerable to the slightest disappointment. Politics won't help.
The economy is good, earnings are strong, and unemployment is low. Our clients are not leveraged. I do not believe that the losses still to be experienced by those who speculate with borrowed money pose any long-term threat to our clients or the economy. My objective is to caution everybody that we might need some of the conviction of the Founders this fall. We are here to help. Stay cool.
* Surveys of Consumers, University of Michigan, online reports. https://data.sca.isr.umich.edu/. Accessed on 07.22.2026.
** Washington, G. "Washington on a proposed third term and political parties, 1799." The Gilder Lehrman Institute of American History. Online. https://www.gilderlehrman.org/history-resources/spotlight-primary-source/washington-proposed-third-term-and-political-parties. Accessed on 07.22.2026.
*** "Declaration of Independence." National Archives, Americas Founding Documents. Online. https://www.archives.gov/founding-docs/declaration-transcript. Accessed on 07.22.2026.