We are here to help you navigate through this period of political change.
Here are some key points to consider:
1) Market Volatility and Inflation: You may see some general commentary about market volatility and inflation. It’s important to remember that these are common reactions to political changes and often settle down as policies become clearer.
2) Tax Implications: There may be some tax implications to consider, but in the long run, there are a few important steps we should take:
- Update Your Beneficiaries: It’s crucial to review and update your beneficiaries. Discuss with your financial professional how you want to transfer wealth, whether it be through a retirement account, inheritance, or other means. Having a financial professional, and if needed, an estate planning attorney and CPA, in the room can provide valuable guidance.
- Investment Strategies: Before making any drastic changes to your investment strategies, including moving to cash, let’s have a conversation. We want to avoid taxable events and market losses that could deplete accounts meant for your retirement or longevity planning.
- Investment Approach: Most investors are fishing from the same pond. If you’re concerned about specific companies or socially responsible investments, remember that most investors deal in funds, ETFs, and index funds. These strategies carefully evaluate holdings and consider various factors, including environmental, social, and governance (ESG) criteria. Interestingly, many holdings in non-ESG funds are also present in ESG funds because companies that perform well in ESG criteria often do well financially too.
3) Historical Market Trends: Historically, the presidential election season brings short-term market volatility. However, as policies become clear in the following months, markets typically refocus on the economic environment. Here are three key takeaways:
- Economic Environment: After the election noise dies down, we expect markets to quickly refocus on the economic environment, which remains strong.
- Market Priorities: Financial markets care much more about economic growth, inflation, and interest rates than who’s in the White House.
- Positive Indicators: Growth is tracking above trend, inflation is falling, and the consumer remains strong.
In short: we are recommending that our clients focus on long-term strategies that are in line with their financial plans. We are not recommending any major strategy changes at this time.
Please feel free to reach out if you have any questions or would like to discuss your financial plan in more detail. We’re here to support you through these times and ensure your financial goals remain on track.
You may reach us at (877) 568-7526 or at team@planningforgood.co.