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Advice from my Future Self

Advice from my Future Self

At this time of year, it’s common for predictions to emerge about the economy. While they are interesting, I don’t think they provide us with much useful information.   Why? Because experts really don’t know anything more than the average investor. They just spend more time analyzing and reporting on available data.   But it […]

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The Reality of Models

The Reality of Models

Checking the weather? Looking at a map of the world to plan your next vacation? Guess what—you’re using a model. While models can be useful for gaining insights that can help us make good decisions, they are simplifications of reality.   One example of a model is a weather forecast. Using data on current and […]

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Holiday How-To: Talking Money with Family

Holiday How-To: Talking Money with Family

Getting together with family over the Holidays presents a unique—albeit delicate—opportunity to discuss finances with your aging parents. We live in a society where asking people about their money is considered rude. Many families are secretive about their savings.   Despite the discomfort, consider how caring for your parents financially might impact your own future […]

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Advice for Investors During an Election Year

Advice for Investors During an Election Year

For the past 25 years I have counselled clients during elections.

It’s typically the same: some are fearful, while others are optimistic.

The reality is that we are pretty much a 50/50 nation. Regardless of whether your favorite candidate wins, about half the country will believe it’s the end of the world and the other half will believe we are heading for prosperous times.

That being said, it’s valid to consider what effect the process of campaigns and electing a new president will have on your investment portfolio. Just don’t spend too much time worrying about it.

I took a survey of recent articles written on the subject and recommend reading 4 Myths About Investing in Presidential Election Years by Joe Delaney from The Bam Alliance Blog, which is a good article that I tend to agree with, and How the Election Will Really Affect Your Investments by Taylor Tepper in Time Magazine—a well-researched article with great graphics and interesting quotes.

Here’s my advice for investors during an election year:

1. No matter who wins, publicly traded companies will plan to be in business seeking to grow their profits after the election. There may be some companies and sectors that expect to have a more favorable political climate if one party wins over the other, but the same goes if the other candidate wins.

2. Tax laws and changes to tax laws have a bigger impact on our everyday lives than who’s acting as President of the United States. Most people don’t realize that, but it’s true.

3. While the impression is that markets prefer one party to win or lose, changes in political parties create uncertainty, which nobody likes. You may have heard that markets prefer gridlock! That’s because things are less likely to change when opposing political parties control the executive and legislative branches.

My hope is that regardless of who wins, we get back to a better working relationship between parties, and that our elected officials will refocus on doing what’s best for the country and not what best perpetuates their time in office!

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

SOURCES
http://thebamalliance.com/blog/four-myths-about-investing-in-presidential-election-years/
http://time.com/money/page/2016-presidential-election-clinton-trump-affect-finances/

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