2024 is a big year for politics. More than half of the world’s population will vote in some kind of election, including the US presidential race. You might think that this will have a huge impact on your investments, and that you need to pay close attention to the news and the polls. But you would be wrong.

The truth is, elections are not that important for your long-term returns. They are just one of many factors that affect the markets, and they are very hard to predict. Even if you could guess the outcome of an election, you would still have to guess how the market will react to it. And that is even harder.

The real danger of elections is not the uncertainty they create, but the temptation they pose. Elections make us want to do something, to act on our opinions and emotions. They make us feel like we have to trade, to switch funds, to buy the latest insights. They make us focus on the short-term noise, rather than the long-term signal.

But this is exactly what we should avoid. As investors, we should not let ourselves be swayed by events that are outside our control, and that have little relevance to our goals. We should instead focus on managing our behaviour, and avoiding the mistakes that can hurt our returns.

Behavioural risk is the risk of making poor decisions because of our biases, emotions, and impulses. It is the risk of buying high and selling low, of chasing fads and missing opportunities, of being overconfident and underprepared. It is the risk that we often ignore, but that can have the biggest impact on our performance.

Behavioural risk is especially high in times of stress, excitement, or change. These are the times when we are most likely to act irrationally, and to deviate from our plan. These are the times when we need to be extra careful, and to stick to our strategy.

Elections are one of those times. They are not the only ones, of course. There are many other events and situations that can trigger our behavioural risk, such as recessions, wars, bubbles, busts, and paradigm shifts. We should be aware of these triggers, and prepare ourselves for them.

The best way to do that is to have a clear and consistent investment process, based on our goals, risk tolerance, and time horizon. We should have a diversified portfolio that matches our profile, and that we can stick with through thick and thin. We should have a set of rules and criteria that guide our decisions, and that we follow faithfully. We should have a way to monitor and review our performance, and to learn from our mistakes.

And most importantly, we should have the discipline and the humility to resist the urge to act on our emotions, opinions, and predictions. We should remember that we are not smarter than the market, and that we cannot foresee the future. We should ignore the noise, and focus on the signal.

That is how we can survive and thrive in any market environment, regardless of who wins the elections. That is how we can reduce our behavioural risk, and increase our chances of success. That is how we can be intelligent investors.