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Louis Bennett

Financial Consultant

COPIA Wealth Management

Election 2016 in Perspective

Aaron Boehm

President

COPIA Wealth Management

Thursday, October 20, 2016

Everything Investors Need to Know—and Should Ignore—

about the Upcoming Election

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2

Overview

1. Clearing a Common Misperception off the Table

2. One Caveat and Two Predictions

3. Six Truths about Washington—Regardless of Who Wins

4. Issues that Could Be Affected by the Election’s Outcome

5. Election 2016—Our Biggest Conclusions

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3

Well-positioned, well-led companies will

create investment value regardless of who

sits in the White House.

A Proper Perspective

Misperception Predictions Six Truths Affected Issues Conclusions

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4

Exhibit 1: Neither Party Can Lay a Claim to Delivering Better Market Performance

The market does not perform any better when the “pro-business” party is in the white house.

Clearing a Common Misperception Off the Table

Misperception Predictions Six Truths Affected Issues Conclusions

Sources: The New York Times. As of 10/26/12. DJIA is an acronym for the Dow Jones Industrial Average. Past performance does not guarantee future

results. http://www.nytimes.com/interactive/2012/10/26/business/Presidential-Stock-Markets.html?_r=0Securities offered through KMS Financial Services, INC. Member FINRA/SIPC

5

Exhibit 2: Investors Who Ignore the President’s Party Fare Best

Sources: Bloomberg, OppenheimerFunds. As of 12/31/14. Past performance does not guarantee future results.

Clearing a Common Misperception Off the Table

Misperception Predictions Six Truths Affected Issues Conclusions

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6

One Caveat and Two Predictions

Misperception Predictions Six Truths Affected Issues Conclusions

Caveat: Forecasting is not an exact science.

Prediction 1 – House of Representatives Prediction 2 – Senate

The Republican Party will likely retain control of the house of

representatives.

Regardless of who controls the senate, the next president isn’t

likely to have a filibuster-proof upper house.

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7

Six Truths about Washington—Regardless of

Who Wins

Misperception Predictions Six Truths Affected Issues Conclusions

1 Gridlock Doesn’t Mean Nothing Gets Done.

Example:

Federal Budget

Sources:

5) https://www.whitehouse.gov/omb/budget/Historicals. Table 1.2.;

6) https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/50724-Update-OneColumn_0.pdf Securities offered through KMS Financial Services, INC. Member FINRA/SIPC

8

Six Truths about Washington—Regardless of

Who Wins

Misperception Predictions Six Truths Affected Issues Conclusions

2 Changes in Washington Don’t Typically Come All at Once But in

Increments.

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9

Six Truths about Washington—Regardless of

Who Wins

Misperception Predictions Six Truths Affected Issues Conclusions

3 Campaign Rhetoric

Doesn’t Always

Influence What

Happens During

a President’s Tenure.

Example: Energy and the Environment

Sources:

5) http://www.eia.gov/forecasts/steo/query/index.cfm?periodType=ANNUAL&startYear=2000&endYear=2015&formulas=x13x4x64x3px20xgx44x2g

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10

Six Truths about Washington—Regardless of

Who Wins

Misperception Predictions Six Truths Affected Issues Conclusions

4 Consumers and Businesses Have a Far Greater Impact on the

Economy than the Government.

Example:

U.S. GDP Share

Source: http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm.

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11

Six Truths about Washington—Regardless of

Who Wins

Misperception Predictions Six Truths Affected Issues Conclusions

5 The State of the

Economy Influences

Who Is President,

Not Vice Versa.

Sources: Bloomberg, OppenheimerFunds. As of 12/31/14.

Past performance does not guarantee future results.

Exhibit 3: Presidential Elections Are

Determined by the Level of the Misery

Index (Unemployment and Inflation Rate)

2004

(Unemployment (Unemployment

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12

Six Truths about Washington—Regardless of

Who Wins

Misperception Predictions Six Truths Affected Issues Conclusions

6 The Market Doesn’t Care If the Public Is Happy with Who’s President.

Sources: Gallup, 2/28/15. The Presidential Approval Ratings were introduced to gauge public support for the President of the United States during the

term. For illustrative purposes only and not intended as investment advice. Past performance does not guarantee future results.Securities offered through KMS Financial Services, INC. Member FINRA/SIPC

13

14

Issues that Could be Affected by the

Election’s Outcome

Misperception Predictions Six Truths Affected Issues Conclusions

1 Public Policy

Healthcare Entitlement Programs Taxes

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15

Issues that Could be Affected by the

Election’s Outcome

Misperception Predictions Six Truths Affected Issues Conclusions

2 Judicial Appointments 3 Regulatory Stance

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16

Conclusions

Misperception Predictions Six Truths Affected Issues Conclusions

America now votes against the other party’s candidate more often than they vote for their own.

Sources: Alan I. Abramowitz and Steven Webster, “The Only Thing We Have to Fear Is the Other Party: How negative partisanship is divid ing Americans

and shaping the outlook for the 2016 election,” University of Virginia Center for Politics, June 4th, 2015.

http://www.centerforpolitics.org/crystalball/articles/the-only-thing-we-have-to-fear-is-the-other-party/.

.

Exhibit 5: Most of Us Dislike

the Other Party More than

We Like Our Own.

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Conclusions

Misperception Predictions Six Truths Affected Issues Conclusions

+130% Cumulative

Price Return

(1/20/1981 to

1/20/1989)

+119% Cumulative

Price Return

(1/23/2009 to

12/31/2015)

DJIA During Republican

President Ronald Reagan

DJIA During Democrat

President Barack Obama

Changing your investments depending upon who wins office, is not a sound investment plan.

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