Presidential elections, perhaps especially this one, can be tough on the nerves. Many clients have asked us to share potential financial implications.
To help you decipher candidates’ policy stances and their implications, review these 2020 U.S. Election Policy Insights articles from Raymond James Financial Services.
Stock market looks beyond the election
The stock market picks up its binoculars to look forward eight or more months. At the moment, we believe it is pricing in a mid-2021 situation that includes:
- An election — contested or not — that is in the rearview mirror. And a system of democracy that continues even if there are difficulties along the way.
- A successful vaccine that is being implemented, even if slowly.
- Further stimulus from the federal government (extending increased unemployment benefits, etc.), likely coming after the election.
- Slow, but continued, economic healing.
Of course, the stock market will continue to be sensitive to increased risks, which include challenges to successful vaccine creation, long-term dismantling of our system of governance, or a lack of federal government stimulus, which could make healing take longer. If stock market performance is dampened in coming weeks due to uncertainty or difficulty, it will likely rebound as challenges resolve.
Our stock market recommendations
We believe that the market evaluated a continuing Trump presidency and a Biden presidency several months ago and, economically, felt it could largely “live with either.” The choice of elected representatives is only one of many factors that affect investment markets.
We are not currently recommending that our clients reduce investment risk due to the presidential election. Their growth/protection strategy was carefully established to account for political uncertainties, as well as their financial needs and preferences.
A key part of our service is to offer context and be a sounding board when clients need it so they can confidently make decisions. Clients, let us know if you would like to discuss this topic further. If you’re not a client and would appreciate a partner on financial decisions, contact us for a no-cost consolation to see if we’re a good fit.
Laura is a Senior Wealth Manager and the Founder of LWP. She has a master’s degree in tax and is an excellent listener. While she is a sophisticated financial planner with experience in complex issues, her priority is ensuring a financial plan works for people.
