The past few weeks have been challenging for our country. We’ve seen some horrific terrorist attacks, and with mid-term elections right around the corner, polls indicate that the country is deeply divided. While the economy has been doing well, the stock market has started to wobble. October, in fact, was the market’s worst month in ten years. For all of these reasons, folks have been asking me whether it might make sense to stand clear of the stock market for a while, until the dust settles. It’s a good question. Below are my thoughts on this topic.

In theory, it makes sense to stand aside when political events begin to spill over into the stock market. But it is difficult. Consider the steps that would be required:

Step 1: The first hurdle, of course, would be to predict what is going to happen and to be correct on the timing.

Step 2: After you predicted an event, you would also need to predict the economic impact of that event.

Step 3: Next, you would need to take action quickly enough to benefit from what you expected to happen. For example, if you thought that the election of a particular candidate would result in a stock market decline, you would need to sell your investments before other investors did the same thing and drove prices down ahead of you.

Step 4: After the event in question, you would need to decide when to reverse course. Continuing with the above example, even if you believed that a particular election would cause the market to drop, presumably you wouldn’t want to stay out of the market forever. So you would need to decide when to buy back in. This is often the hardest step.

Step 5: Finally, you would need to determine whether the event in question would have any long-term impact. For example, the recently-enacted corporate tax cuts gave a boost to stocks, but they are also driving up the Federal debt more quickly than before. Will that have some negative impact down the road? If so, to what degree, and when?

As you can probably tell, my view is that it’s exceedingly difficult to get all five of these steps right. While it was perhaps an outlier, the 2016 election provides a good example of how hard this can be. In the days leading up to the election, nine out of ten polls predicted that Hillary Clinton would prevail. And among those who hypothesized about Donald Trump winning, many predicted a negative economic outcome. For example, Simon Johnson, a well-respected MIT professor, predicted that if Trump were elected, it would “likely cause the stock market to crash and plunge the world into recession.” Goldman Sachs predicted a 25 percent crash in the Mexican peso. Others had similarly negative expectations.

What has actually happened? As you know, the economy is doing well. The stock market has been bumpy recently, but it still stands 28 percent above where it was on Election Day 2016. And the Mexican peso is basically unchanged over that same time period. In short, virtually all the prognosticators were wrong.

To be clear, I am not disparaging those who failed to see what was going to happen. Rather, I am simply using them as an example to illustrate how hard it is for anyone to do that. In fact, even those in power have a very difficult time predicting how things will go. Recall that in February of this year President Trump appointed Jerome Powell to lead the Federal Reserve. But barely eight months later, when the Fed hiked interest rates, causing the stock market to dip, Trump bitterly criticized his own appointee. In an interview, the president complained, “I don’t know what their problem is that they are raising interest rates and it’s ridiculous. The Fed is going loco…I’m not happy about it.”

So what’s the solution? Is there any way to protect one’s self from the uncertainties of the market? As mundane as it sounds, I think the answer is asset allocation. Since the stock market offers no guarantees, the only way to sidestep that uncertainty is to shield sufficient assets outside of the market. In addition, be sure that the assets you do have invested in the market are adequately diversified. That’s because some political events affect certain industries more than others. Diversification gives you a better chance of dampening these effects.

I hope that next week is a more peaceful week. In the meantime, I hope that these suggestions provide you with greater financial peace of mind.