Emmanuel Macron defeated Marine Le Pen on May 7th, 2017 to win the French presidential election.

You are probably wondering what this has to do with your investment portfolio.

I bet you are also wondering why you should care about this election.

Who Is Emmanuel Macron and Why Should You Care?

You don’t really need to know Emmanuel Macron’s background but you do need to know he is the pro-European Union candidate.

His political views are moderate.

Marine Le Pen is far right leaning in her political views and she was going to pull France out of the European Union.

Don’t get me wrong, if I lived in France, I wouldn’t want to be in the European Union.

But I don’t live in France so I am glad they voted in the candidate that will keep them in the European Union.

Why? Just take a look at this quote from the MarketWatch article.

The victory on Sunday for the 39-year-old Macron—a staunch supporter of the European Union—is likely to placate anxious global market investors, who have fretted for weeks that far-right candidate Le Pen would win and make good on promises to yank France out of the EU, potentially unsettling the eurozone and world markets.

The world markets were watching this election closely.

And I doubt the reaction would have been positive if Marine Le Pen won the election.

It reminds me of another vote Europe just held in June of 2016.

How Different Election Results Would Have Impacted Your Investment Portfolio

Do you remember Brexit? I do.

I still have scares on my back from a very poorly timed 401(k) fund switch.

Great Britain voted to leave the European Union on June 23rd of 2017.

Why is that important?

It gives you a glimpse into what would have happened to your investment portfolio if France voted to leave the European Union.

After Great Britain voted to leave the European Union, the S&P 500 Index fell 5.34% in two days.

That’s a 113 point drop. That’s thousands of dollars lost in 2 days.

Luckily the market recovered quickly.

But you lost a lot of money if you sold in a panic.

How Could France Still Get Pulled Out Of The European Union?

This gets a little complicated with French politics but Macron could be rendered powerless if his new party doesn’t pick up steam in the coming elections.

Here’s a video that breaks it down.

So we are not out of the water yet.

Investors will be watching France in the coming months.

You should too but don’t panic no matter what happens.

Summary

You ever heard of the saying, “Those who don’t know history are doomed to repeat it”?

That is perfect for this situation and fortunately we don’t have to look back to far to find a perfect example.

Be prepared in the coming months for market volatility during the French election season.

If nothing happens, that’s great. But be prepared for the worst.

Did you get caught with your pants down by Brexit?

If so, let me know in the comments below.

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