Keep Calm and Carry On as Markets Adjust to Trump Presidency
If you’re worried about all the political and economic changes ahead, you’re not alone, but there are some reasons to take comfort, too.
Well, this is different. A real estate mogul and reality TV star has become the 45th president of the United States. He isn’t a politician, he’s never held office, and it’s unclear what he’ll prioritize. And that’s something we aren’t used to.
We know Donald Trump, of course. What we don’t know is how he’ll transition from billionaire businessman to commander in chief.
Investors are, naturally, a little nervous about that, given the uncertainty about what Trump’s policies will be, and how they’ll affect the stock market. Wall Street doesn’t like uncertainty, at least not historically.
But the dire downturn everyone expected right after the election didn’t happen; the markets dipped for a minute, and then actually climbed higher.
Who knows what will happen next? There still could be some volatility as the new administration gets down to work — some ups and downs as we all try to figure things out. Or it could be that issues already in play — inflation, interest rates, unemployment — will be what really influence the market’s mood.
Either way, investors should stay the course.
Advisers are always telling their clients (and potential clients) that they need a plan. What’s just as important in times like these is to stick to that plan. Yes, we’ll need some flexibility to tweak things if necessary. But one of the worst things you could do is let your emotions take over and cause you to change your saving and investing strategies. In my experience, that’s pretty much a guaranteed way to lose money — particularly if you are near or in retirement.
If you’re a worrier looking for positives, there are plenty. During the campaign, Trump talked about lowering taxes for both corporations and small businesses, which could improve their earnings potential. And he has proposed other changes, most notably eliminating the estate tax, which would benefit a number of wealthy individual taxpayers.
Trump also will likely decrease regulation on some businesses, including energy, banking and biotechnology, which should stimulate those industries and energize the economy. The same goes for his plans to devote money to modernizing the nation’s aging infrastructure.
And actions that already were underway — raising interest rates, changing the fiduciary rule — should proceed in some form that also can be a plus for investors in the long run.
If you aren’t a Trump fan, you can take comfort in knowing that any policies that come from his administration probably will take at least six months to a year to implement. So, we’ll have plenty of time to react to changes without making any knee-jerk mistakes.
And if you like to look at statistical data, while not necessarily indicative of the future, there’s evidence that with time, the market goes north, no matter which party is in office.
The important thing — and this can’t be stated too strongly or too often — is not to panic. If your portfolio is diversified and you and your adviser have done a good job of determining your objectives, mapping out your retirement time frame and investing according to your risk tolerance, you can be confident you’re on the right path.
If you have questions or concerns, however, never hesitate to call your financial professional and set up a meeting.
Steve Fullerton is co-founder of Fullerton Financial Planning and is FINRA licensed with Series 7, 63 and 66, as well as health and life. He is the founder and president of Kingdom Financial Group LLC, a Registered Investment Advisor with the SEC.
Kim Franke-Folstad contributed to this article.
About the Author
Co-Founder, Fullerton Financial Planning
Steve Fullerton is co-founder of Fullerton Financial Planning and is FINRA licensed with Series 7, 63 and 66, as well as health and life. He is the founder and president of Kingdom Financial Group LLC, a Registered Investment Adviser with the SEC.