Election Got You Worried & Pondering Portfolio Changes?

QUESTION:

I think the November election will change America’s leadership and direction. What should I do to prepare?

ANSWER:

As the 2016 election showed, predicting outcomes and impacts is a gamble. Even if you get the outcome right, forecasting specific policies and their economic impact is even trickier. In short, don’t panic over polls and pundits.

However, it’s not too early to consider what might affect your portfolio this election season. Keep the following points in mind:

• Markets dislike uncertainty and therefore don’t like elections. It’s not uncommon to see markets fall prior to an election just because of its unpredictability.
• Similarly, markets usually rise after an election because most of the uncertainty has dissipated.
• Despite campaign rhetoric, elections do not typically create a sea of change in the markets or economy. Good policies are important, but remember that the American economy mostly runs on free enterprise and not on the government.
• Don’t underestimate American enterprise. Businesses are really good at adapting to changing conditions.
• Your wealth management and investment strategy should be based on long-term goals and economic trends, not which party controls the government.

That said, shorter-term tactical moves might be prudent if significant policy changes are in the wind. But in the meantime, stay grounded to real long-term economic trends rather than getting caught up in the campaign rhetoric.

Please contact us if you would like to discuss your portfolio and the options going forward.