Are You Prepared for an Uncertain Election?

With the uncertainty of what will happen this November, it is important to remember sound principles and look to history for context.

Here are some facts to consider:

 

This week Anthony Saffer CFP®, CKA® & Alex Okugawa CFP®, CKA®,CEPA® shed light on how investors can plan around the uncertainty of election cycles.

Full Transcript:

Alex: Hi there, and welcome to One Degree Advisors where we help families cut through the noise to make confident financial decisions. You know Anthony. I know there’s a lot of questions  going around right now of whether we will know the election results this November due to the number of mail-in ballots and the fact that it could be a hotly contested election due to the uncertainty. So a lot of folks are wondering how should I prepare for an uncertain election?

 

 

Anthony: When it comes to an Investment Portfolio and for preparing for this type of uncertainty, we know that the markets really don’t like uncertainty. The problem is is that it’s very hard to try and outguess this I’ll give you a couple examples in in 2000 when George w-Bush defeated Al Gore the election took place on November 7th. I believe. It wasn’t actually like conceded until December 13th.

 

 

Alex: That’s quite a bit of time. Yeah.

 

 

Anthony: Yeah during that time the market actually did go down 5.34%. Okay, but one that’s only one example and number two, we were in the midst of a big downward trend coming off the Tech bubble bursting in 2000. So it’s really part of a downward trend. If we look at 2016 some people theorize that okay Trump beat Clinton and there was some uncertainty around that with the popular vote verses the Electoral College. Stock market futures went down about 8% that night and you can easily say, okay.

Well that kind of uncertainty is going to cause a cause of negative but really from that point forward the market took off on a historic run. So these are just a couple incidences, but it’s hard to really make a decision off that and say “Here’s a definitely what’s going to happen.”

 

 

Alex: Yeah, and of course I know folks will say every time you know, this time is different and and of course every time it’s going to be different right? I mean, it’s very rare things look exactly the same, what we can do is use our best judgment use history as our guide. Try and avoid a rational or emotional decision and again spread out our risk or diversify.

 

 

Anthony: Yeah spread out your risk by what you own which is a good principle obviously that we talked about with investing overall, but the other thing is know your short-term assets versus your long term assets. You don’t want to necessarily get out of the market or you should at least really consider those types of extremes very very carefully, but money that’s meant for the short term should be more conservative. Your long term assets if they do fluctuate in value, then they are really meant for the long term. You don’t need them. So it shouldn’t be as big of a concern if there is that type of volatility.

 

 

Alex: Great. Well, excellent advice as always Anthony. Thank you. Again. If you would like to talk with us, maybe talk through your portfolio financial plan. You know, what would it look like if we were to experience a bear Market heading into this election cycle? How does this impact my plan? Maybe it impacts my retirement. Should I delay?

These are the questions that we can help you answer, and we love working with folks. So give us a call visit our website. We would love to talk with you.

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