The election of 2016 turned out to be one of the most unique, unexpected elections in recent memory. All of the pundits were left scratching their heads starting from the point that candidates began announcing their candidacy all the way through the night of the election. I’m sure they will be spending countless time and energy trying to dissect what has happened and why. I’ll leave that to them.
I wanted to briefly share my thoughts on the election. More importantly, I want to share what I think we should all be thinking about looking forward and its impact on our financial lives. Whether your candidate won or lost, I believe we need to work to come back together after this contentious season.
I expect that President Trump will do better than some expect and disappoint many of his supporters. Since Trump has no record as a politician and due to the nature of his campaign, its hard to know which of the policies that he promoted on the campaign trail will be able to get through Congress. His eventual success will probably depend on his ability to win over those whom he has upset and on those that he surrounds himself with.
The first day of trading post-election, the stock market whipsawed from down to positive as people were trying to decide the impact of a Trump presidency, finishing with solid gains. I want to encourage you to not get too worried about the short-term swings of the stock market, just like any other time. Instead, focus on your financial plan. What are your long term expectations and how do they work in your plan?
I believe that no matter who had won the presidency, the new Commander in Chief will have to face some pretty severe decisions sooner, rather than later. Our economy continues to see slow growth and I’m afraid it could be toppled with ease. That’s why the Federal Reserve has kept interest rates low. They don’t want to take their foot off of the gas, much less tap the brakes. The global economy seems to sitting on a knifes edge, and could go either way.
Because of the low interest rates, we are seeing an increase in debt around the world. Many people, corporations, and governments are taking advantage of these rates. As global debt increases, it will have long term impacts on future returns and opportunities, because these debts will have to be paid back at some point.
These types of economic challenges aren’t new or unique. As a matter of fact, they seem to crop up on a pretty consistent basis. I don’t want to worry everyone, but I don’t think that this is a time to sit back and rest on your old financial plan. With a tenuous economy and the impact of low interest rates, I feel it’s important to sit down and reevaluate your long term financial plan and your expectations. It’s time to plan for what ever is coming, whether good, or not as good.
Please contact your financial advisor or planner. Ask them what their plan is for you and your investments. There will be changes and challenges coming - there always are. Please be sure to prepare yourself. I will be happy to sit down and talk with anyone about their financial plan and see if we could be a fit to help prepare you and your family.