All 50 states and the District of Columbia have now certified their presidential election results, and President-Elect Joe Biden will drive our next four years. What does that mean for your investments as you move closer to retirement? Unfortunately, an election taking place at the height of an unprecedented global pandemic doesn't exactly lend itself to historical comparisons, but we can make a few assumptions.
A political party doesn’t historically have a considerable impact on market performance. The truth is, presidents don't operate in a vacuum, and a few major corporations have the most influence on the markets.
More impactful is that we’re likely headed for a divided government. If projections hold, we can expect a Republican-controlled Senate and a Democratic-controlled House of Representatives. As an investor, you’re most likely concerned with the impact this leadership will have on your taxes. Good news for you, a divided government will almost certainly result in more moderate tax law changes than the initial proposals that relied on a Democratic sweep of Congress.
One of the great lessons from a year that has been a whirlwind of historic hurdles and uncharted territory is that only time will tell. Time will tell us if this new administration will positively or negatively impact the markets; time will tell if we're at the end or the height of the pandemic. But if time has told us one thing: your best bet is to stay true to your long-term strategy.
If you're concerned about how any of these shifts may affect you, now is a great time to contact us and determine how you can prepare to face these changes with certain tax-advantaged vehicles.
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