Ep.150- Elections and Your Investments: Staying Calm Amid Political Noise

Discover why election outcomes might not be as critical to your investments as you think. Join me, Stacey Hyde, as I tackle the common misconception that political shifts drastically affect financial markets. With election day upon us, it’s crucial to understand that while casting your vote is vital, it’s equally important to keep a level head when it comes to your portfolio. Our political system is designed with checks and balances that ensure gradual changes, which means immediate market reactions should not dictate your financial decisions. Learn how maintaining patience and avoiding hasty decisions can truly benefit your long-term financial health.

Throughout this episode of Better Financial Health in 15 minutes or less, I stress the importance of focusing on the bigger picture rather than getting caught up in short-term political noise. While market fluctuations can create anxiety, having a bit of extra cash can provide peace of mind without the need to overhaul your investment strategy. Remember, elections come and go, but your financial goals remain. Tune in to gain insights on nurturing a steady and resilient investment approach, regardless of who holds office. Let’s calm the storm of panic with thoughtful strategies for enduring financial well-being.

Envision Financial Planning. 5100 Poplar Avenue, Suite 2428, Memphis TN 38137. (901) 422-7526, This communication is strictly intended for individuals residing in the United States. Advisory Services offered through Envision Financial Planning, a Registered Investment Adviser.

Transcript

Speaker 1: 0:00

Hi, I'm Stacey Hyde and I'm back with another episode of Better Financial Health in 15 minutes or less, and today I would like to talk about elections and their impact on the markets. That is a question that we've been getting a lot today. As I record this, it's election day. Please exercise your right to vote. It is important, but I think the thing to keep in mind your right to vote it is important, but I think the thing to keep in mind is that elections overall don't have huge impacts on the markets or your investments, so it doesn't matter if the Democrats win or the Republicans win. The way our systems are set up is that there's a lot of balance there, because you've got Congress, you've got the Senate, you have your local and state legislatures and they do see some interspersing there. I would really encourage you not to take any action based on the election outcome, because markets have a way of level setting themselves. Got to remember that the change in power won't happen until January, so there's no need to take an immediate action there.

Speaker 1: 1:27

We can be calm and really just measured about our approach. You know, if you're worried, you may want to have a little more cash on hand, because that will get you through any sort of pullbacks in the market and things of that and any emergencies that might come up during that time. Because, at the end of the day, having a little extra cash while a lot of advisors will tell you that's a bad thing. I'm not one of those folks. I think that cash helps, keep us calm, lets us sleep at night, and it can be a good thing. Keep us calm, let's us sleep at night, and it can be a good thing. But moving your entire account to cash, unless you're going to use that entire account within the next two years to make a large purchase, that's probably not wise. And if you've been investing over the last few years, you probably have a lot of gains in that portfolio. So if you do sell and go to cash and it's not a retirement account, it could cause you to have to pay capital gains taxes or, if those gains are less than a year ordinary income rates, which can push you into a higher tax bracket.

Speaker 1: 2:39

If it's in a retirement account and you, even if you're going to retire next year, the truth of the matter is your retirement is likely to last 20, 30, 40 years or more, depending on when you retire, and so you still have a long-term approach and so you don't want to react on your portfolio based on the outcome of an election. So I know that there's a lot of hand-waving going on. There's a lot of doom and gloom that's being spoken, but I think what we can do is to stay calm, love our neighbor, have some patience and really try to not add to the um panic or uh negativity surrounding the elections, because at the end of the day, whoever gets elected, there'll be another election four years from now and, and actually two years from now, we'll vote on the Senate and Congress and local folks all over again. So, while it can have big impacts in the shorter term, the longer term is what matters to your portfolio. So I would encourage you not to make any big changes, no matter which way this election goes.

Speaker 1: 4:05

So thanks for tuning in and have a great day. This has been another episode of Better Financial Health in 15 minutes or less.