Your guess is…as good or bad as anyone else’s
By Ted Schwartz, CFP®
As election season approaches, our clients are wondering how the election will affect their portfolios. Whether it makes sense or not (markets have done better under Democratic party rule than Republican rule in recent decades), the market likes Republican rule as the outcome to an election. That was mainly because the market liked the certainty and philosophy of the Republicans:
- Lower taxes
- Fiscal responsibility
- Free trade
- Less regulations
While, the party of Lincoln still believes in lowering taxes and fewer environmental regulations, there is no sign of fiscal responsibility or affection for free trade left in the Grand Old Party.
The Democrats seem a bit more predictable at this point. They will continue to favor government programs to improve people’s lives, regulations on business, and scant information on how they plan to pay for these initiatives (though some how the very rich will be taxed to solve the shortfalls).
In addition to these economic concerns and the market’s inability to calculate the long-term fallout of these policy tilts, we have the added possibility of investigations or even impeachment hearings should the Dems wrest control of both the House and the Senate in the election.
In short, the market (and all the “talking head” pundits who will be proffering their wisdom in coming weeks) does not have a clue as to what will happen short term or longer term as a result of this election. So, we suggest
you sit down with some popcorn and watch the drama unfold. It should be a thriller!
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