So might be the credo by which investors have lived in the first half of 2012. Following an impressive first-quarter performance, the markets posted declines in April and May, then recovered in June (with the Dow Jones Industrial Average posting the largest June point gain in its history).

 

Still, the market scorecard as of June 30, 2012, saw the Standard & Poor’s 500 up 9.49% since the beginning of the year, just slightly below the historical annual average performance of the index. For 2012 (so far, at least), the markets have given more than they’ve taken away, and investors can be grateful.

 

For the rest of the year, the presidential election cycle practically guarantees plenty of drama, to be sure. But the election cycle lessens the chance of any fiscal policy change that will dampen economic recovery. If history is any guide, incumbents tend to act in such a way as to stimulate the markets and economy before a presidential election.

 

Of course, after the election, the hot air dissipates, sending markets floating back to earth with a thud as likely as with a soft landing.

 

Patient long-term investors tend to watch politicians, economists, and other pundits from the sidelines, amused and entertained by the goings-on but never tempted to actually enter the fray themselves. Our course of action is not swayed by the 24-hour news cycle. We remain convinced of the efficacy of our buy-and-hold approach.