How does this year’s election results impact your finances? We run through several possible outcomes to see what may be most beneficial from a financial standpoint.
(Click the featured times below to jump forward in the episode)
As we near the election this year, what should we know about potential outcomes? From a financial standpoint, what could the presidential election mean for your portfolio? On today’s episode of Cover Your Assets KC, we discuss what may be in our future. Since this is not a political podcast, we’ll continue to focus on the financial side of things while talking about the possible impact of politics.
Let’s start with the possibility of all one party getting elected. If there is a Democratic president, Democratic senate, and Democratic house then you will have higher taxes and more regulation. Which taxes and which regulations will impact your portfolio? More regulations may be put on banks, big technology companies, the environment, and stock buybacks. What happens if there is a corporate minimum tax implemented?
Now, what if the power stays about the same and President Trump gets re-elected? We would probably have a continuation of existing tax policies that we have and existing regulatory framework. But we would likely face increased volatility. What will make a significant change is getting a COVID vaccine.
If there is a split government with both Democratic and Republican control, that might bring about the most limited change for the markets and likely the best scenario for your portfolio. If Biden was president, there would likely be lower volatility and therefore a better market.
Does it really matter overall? What does history tell us about how the elections impact our portfolios? How does the DOW Jones react with a Democrat versus a Republican in the White House? What about when one party runs all three? How about a split house?
From an economic standpoint, what will the best outcome be this election season? Make sure you and your advisor have a plan for your money as the election unfolds.
Listen to the entire episode or click on the timestamps below to jump ahead to different scenarios.
[0:32] – What’s the latest in the news?
[1:36] – Which presidential outcome will be best for your portfolio?
[3:31] – What happens if it is full Democratic control?
[4:22] – What regulations may be added with Democratic politicians in office?
[6:44] – How would the payroll tax work?
[10:04] – What happens if President Trump is re-elected, the house stays Democratic and the Senate is Republican?
[12:47] – What is the key focus going forward?
[13:37] – What happens if Biden becomes president, the Democratic house stays in place, and the Senate is Republican?
[14:59] – What really matters?
[19:04] – What should your financial plan include?