Believe it or not, Donald Trump is now our president. Now that the inauguration dust has started to settle, experts are analyzing and dissecting his campaign promises and proposed measures to predict how his leadership will affect various sectors of our nation. More than anything else, people are curious, and probably a bit concerned, about how a Trump presidency will impact their personal finances.
While we can’t predict the future, here are some insights on what to expect and some strategies to help you strengthen and protect your portfolio in the midst of change and uncertainty.
Stay the Course
Market uncertainty is normal and expected in the average economic cycle, but even more so when accompanied by unprecedented political events. We witnessed how quickly the markets recovered once Trump had been declared the winner of the 2016 presidential race, from a 700 point plummet to record highs, all in one week. This rollercoaster market behavior is a reminder that when it comes to your financial plan, it’s wise to stay focused on the long-term. Short-term turmoil will always be upsetting, but if you have the right perspective, you will be able to ignore the noise and continue to build for a successful retirement.
To set yourself up for success, follow these tested financial strategies:
Don’t put all your eggs in one basket. Speak to a trusted financial expert to see where your portfolio could use some diversification. For example, don’t rely solely on stocks, look globally, and even look into real estate as an alternative option.
While the accounts we manage for you are well diversified, now may be a good time to review your outside accounts, including 401(k)s and other assets, to assess risk and determine if any action is warranted.
Know Your Risk Tolerance
Do you know your personal risk level? Consider all aspects of your life, such as years from retirement, income, debt, and even personality, and apply your risk number to your investment strategy. Don’t just assume you know what level of risk you are comfortable with.
Many people underestimate the importance of rebalancing their portfolio. Rebalancing is like a regular health check up. It might not turn up anything, but it could result in small changes that will make a powerful impact down the road. Diversification is not enough to keep your portfolio safe. Rebalancing ensures that your investments match your risk level and that you haven’t become too reliant on any one asset category.
Social Security is a benefit that may make a significant difference in your retirement income, but don’t rely on it too heavily. In the past, Trump has given his support for the program, but with his promises to abolish Obamacare and cut taxes, the future of Social Security and Medicare is far from certain. Maximize your IRA and 401(k) contributions, create a nest egg, and feel secure that your retirement is taken care of.
If you are unsure about where you stand financially and feel less than confident in your retirement strategy, it helps to have someone who can help you remember to see the forest through the trees. An experienced financial professional or retirement coach can help you evaluate the markets and make decisions based on knowledge and understanding instead of media hype.
I Am Here For You
While it’s easy to become concerned about finances when unpredictable events occur, remember that the White House doesn’t control the markets. There are always other variables involved that play an important role in market success or failure, such as international events, oil prices, and corporate earnings.
I believe that the election outcome will not interfere with your ability to achieve your long-term financial goals and that the best thing that you can do is to take control of your financial situation. If you would like to review your current investment portfolio or have questions regarding the stock market, please contact me today by calling my office at 770.249.7424 or emailing me at firstname.lastname@example.org.