I am writing this before the polls close on Tuesday. So, who knows how things turned out?
We had record voter turn out and a high degree of engagement from both Republicans and Democrats. And, most folks are at least a little concerned about what will happen in the coming months based on the outcome of the election.
All my clients should know that as a fiduciary financial planner with investment management discretion, it’s my responsibility – and my commitment – to monitor the market conditions, adjust asset allocation and investment selection ANY TIME that it will benefit my clients. My clients DO NOT need to worry. They are paying me to worry for them.
History tells us that markets don’t care very much whether the president is a Republican or a Democrat. So, if you are investing for retirement 10 years from now, the result of the election does not matter that much. The chart below shows annual positive returns for both Republicans and Democrats since 1950.
One thing is clear from history: It is NOT a good idea to let your politics drive your investment decisions. The chart below shows the results of investing ONLY in years under a Republican president or a Democratic president. Neither approach lead to growth even close to staying invested across both flavors of president.
Again, the message is that if your goals are long term – over 10 years in the future – you DO NOT care who won the election.
Remember, even if you retire tomorrow, only SOME of your money is money you plan to spend in the next three years. So, a lot of your retirement money is LONG-TERM money most all the time.
Another thing that’s been discussed a bit by some folks is the potential impact of having the President of a different party than the control of Congress. The chart below is notable because it shows mostly positive returns in the first year, regardless of how control of government is shared among the parties.
So, while you might be surprised at the results of the election – whenever we know them – you should not be AFRAID. Long-term investments will do great no matter how things turn out. If the market is surprised, it’s likely that we will see big changes in investment values over a short period of time. That’s why I advise clients to keep adequate cash at hand. If you can cover your cash needs for the next six months or a year, then the market will have plenty of time to adjust to any surprises that come along.
If you would like to consult with an expert about having enough cash. And if you would like to have a fiduciary advisor responsible for your portfolio allocation and your investment selection, then you might want to talk to a couple CERTIFIED FINANCIAL PLANNER™ professionals.
To find a CFP® professional near you, start your search here.
As you visit with financial planners, I suggest a couple things to check:
- Is the advisor always the client’s advocate – a fiduciary advisor?
- Is the advisor only paid by clients, not any financial product manufacturer or distribution network? That would be a fee-only advisor.
These two points help assure that you are working with a professional who is committed to your best interest at all times. It seems sort of obvious to me that a professional would work in this way, but it’s not automatic.
A fiduciary, fee-only, CFP® professional can help you make great retirement income choices and develop a comprehensive financial plan that is driven by your goals and priorities and addresses all aspects of your financial life. With a big-picture approach, you will be better prepared to understand your options at every step along the way.
Yes, I am a CFP® professional. I’m always a fiduciary. And yes, I’m still taking on a few great families to be part of my financial planning practice.
Find a time for us to talk. HERE.
If this article has you thinking about your own circumstances, contact my office at rdunn@dunncreekadvisors.com. I am always happy to meet with people who are working on their retirement plans. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.