How might the election affect your investment outlook? - Ahwatukee Foothills News: Money

default avatar
Welcome to the site! Login or Signup below.
|
||
Logout|My Dashboard

How might the election affect your investment outlook?

Print
Font Size:
Default font size
Larger font size

Related Stories

Posted: Saturday, October 20, 2012 6:49 pm

Election Day is drawing near. As a citizen, you’ll want to cast your ballot for those candidates who best represent your views on a range of important issues. But as an investor, you might be wondering how the election’s outcome might affect one specific area — your financial outlook.

There’s no simple answer, of course. But a look back in time does reveal some points of interest.

Most notably, the stock market and the economy have performed well, on average, under every combination of Democrats and Republicans in Washington. But there are differences — specifically, the economy has historically grown faster under Democratic presidents and when Democrats had the majority in Congress.

On the other hand, inflation has historically been lower during Republican presidencies and congressional majorities, resulting in improved performance for the bond market.

Still, these tendencies don’t necessarily have predictive power. Furthermore, when assessing the long-term effect on investment prices, there’s strong evidence that market forces — such as corporate earnings, consumer spending and interest rates — are more important than politics or elections. Consequently, you’ll want to stay current on these market forces as you monitor your investment strategy over time.

But wait — won’t your tax situation change, based on who wins the election? Specifically, won’t there be changes related to how your investment earnings are taxed?

At this stage, it’s hard to predict what these changes might look like, if they happen at all. Keep in mind that the next president, no matter who he or she is, will need to get his plan through Congress, so whatever emerges in the way of tax changes may look considerably different than what either candidate proposes.

That’s also the case for other policy changes, and it’s one of the main reasons that you shouldn’t “play politics” with your investment portfolio. It’s difficult to guess what will happen to policy — and the consequences are frequently different than intended.

Ultimately, your investment success will depend less on the decisions made by a president or Congress and more on the decisions that you make.

So, instead of thinking about what the financial markets might do if one party is in power, or focusing too much on how your investment taxes may change if one candidate is elected president, cast your “vote” for solid investment principles, such as buying quality investments, holding them for the long term, staying aware of your risk tolerance and, especially, diversifying your holdings.

While diversification can’t guarantee profits or prevent losses, it can help reduce the effects of volatility on your portfolio — which will make it easier to establish a strategy and stick to it.

Like many people, you’ll be interested in the outcome of the election. But when it comes to taking charge of your financial future, don’t wait for Washington.

You’re in charge — you’re the one who will need to gather the resources and get the professional help necessary to keep your investments aligned with your long-term financial goals. Don’t be distracted by the political rhetoric — and use your power wisely.

• This article was written by Edward Jones for use by Ahwatukee Foothills Edward Jones Financial Advisor Kim DeVoss, CFP. Reach her at (480) 785-4751 or Kim.DeVoss@edwardjones.com.

More about

More about

More about

  • Discuss

Is the U.S. missing out on skills of the educated and undocumented?

PHOENIX — What was supposed to be a year in the U.S. to learn English and advance her career became 11 years for Karla Ayon, a life without le…

Published: August 29, 2016 - 9:29 pm @ http://www.nbcnews.com/news/latino/u-s-missing-out…

News Guide: McCain, Arpaio draw interest in Arizona primary

PHOENIX (AP) - A challenge to longtime U.S. Sen. John McCain leads the lists of contests drawing attention in Tuesday's Arizona primary electi…

Published: August 29, 2016 - 8:57 pm @ http://www.cbs5az.com/story/32870929/news-guide-mc…

Students at Buckeye school stage walk out over 'Black Lives Matter' controversy

BUCKEYE, AZ - Racial tensions at a Valley high school caused students to walk out of classes on Monday.  More than a dozen black students at B…

Published: August 29, 2016 - 8:28 pm @ http://www.abc15.com/news/region-west-valley/bucke…

Hunt for Planet Nine leads to mini-worlds

The hypothetical world known as Planet X or Planet Nine hasn’t yet been found, but thanks to the search, astronomers have discovered smaller w…

Published: August 29, 2016 - 8:26 pm @ http://www.geekwire.com/2016/search-planet-nine-tu…

Late movie star Gene Wilder filmed movies in Tucson

TUCSON, AZ (Tucson News Now) - Late actor/comedian Gene Wilder famously known for his role in the family movie Willy Wonka and the Chocolate F…

Published: August 29, 2016 - 7:58 pm @ http://www.tucsonnewsnow.com/story/32870431/late-m…

Arizona developer gets prison over false bankruptcy record

PHOENIX - An Arizona real estate developer has been sentenced to two years in prison for submitting false statements in his bankruptcy petitio…

Published: August 29, 2016 - 7:57 pm @ http://www.abc15.com/news/region-phoenix-metro/cen…

Clinton and Trump Are Less Forthcoming Than Past Candidates

The reporters were summoned to a hotel conference room and told they had three hours to review 1,173 pages of the septuagenarian Republican pr…

Published: August 29, 2016 - 7:31 pm @ http://time.com/4471764/donald-trump-hillary-clint…

Joy Reid - Timeline

See more of Joy Reid by logging into FacebookMessage this Page, learn about upcoming events and more. If you don't have a Facebook account, yo…

Published: August 29, 2016 - 7:03 pm @ https://www.facebook.com/joyreidofficial/posts/998…

ABC15 Arizona - Timeline

See more of ABC15 Arizona by logging into FacebookMessage this Page, learn about upcoming events and more. If you don't have a Facebook accoun…

Published: August 29, 2016 - 6:56 pm @ https://www.facebook.com/ABC15/videos/vb.183563413…

Conservationists Want Obama to Protect an Underwater Grand Canyon

President Obama made history last week when he more than quadrupled the size of a protected marine area off the coast of Hawaii, safeguarding …

Published: August 29, 2016 - 6:31 pm @ http://www.takepart.com/article/2016/08/29/coral-s…

Facebook

ahwatukee.com on Facebook

Twitter

ahwatukee.com on Twitter

RSS

Subscribe to ahwatukee.com via RSS

RSS Feeds

Spacer4px

Most Popular

Online poll

Loading…