During his inaugural address, President Donald Trump said, “From this day forward, it's going to be only America first.”Like his campaign slogan, Make America Great Again, this call to action resonated with a particular segment of Americans who want lower taxes, more jobs and less political corruption. Trump started this work by signing a host of executive orders in the first month of his presidency.
Politics aside, is there a lesson to learn from Trump about how to better your own financial life?
It’s time to make your portfolio great again
Executive actions are directives presidents gives to the federal government and related agencies regarding politics and policy. Similarly, make sure to direct your financial future by emphasizing safety, security and control in your portfolio.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
1. Aim for safety
President Trump aims to secure U.S. borders including building a wall along the border with Mexico to “make America safe again.”
How can you do the same for your portfolio?
- Enforce boundaries between investments. Don’t let bonds with creeping correlations to stocks hold your portfolio back. Empower your investments with a healthy dose of true diversifiers, investment strategies that historically lowered risk and increased returns in declining markets.
- Stop chasing diversification for diversification’s sake. Ensure your portfolio has a blend of passive and active investments—stocks, bonds and alternative investments—to be well positioned in all market conditions.
2. Amp up security
Promising a strong America abroad, the president has promised to spend whatever is necessary to empower the military and improve national security.
Securing your portfolio requires a handful of actions that should make you much more than you spend:
- Rebalancing is key. Taking a moment once a year to reinvest your earnings from high-performing assets into underperforming ones balances risk in your portfolio.
- Look for quality. Security is often related to quality. Most people know to ask about the investment strategy and track record. Few go the extra step to find out if the money manager invests in his own strategy.
3. Stay in control
There’s no doubt President Trump likes control over his message. On Day One, he got a secure smartphone and is even keeping his personal Twitter rather than defaulting to the @POTUS handle.
Keep control of your investments by actively:
- Controlling emotions. Both fear and greed rob you of returns. Sticking to a long-term plan and staying out of the fray of day-to-day market movements can help investors do what they instinctively know is right – buy low and sell high.
- Finding the right partner. Whether that be a robo-adviser, a flesh-and-blood financial adviser or a trusted money manager, the average investor would do well to have an expert help them craft a financial plan.
Don’t let events happening around you dictate your financial legacy. Instead, move forward, take executive action and make your financial future great again.
Stephen Scott is an alternatives and hedge fund investment veteran, with more than 25 years of experience in due diligence, risk management and index construction.
-
Could This Little Known Data Shift Hurt Your 2026 Social Security COLA?The BLS has changed how it measures the inflationary data that determines whether Social Security benefits will get a Cost-of-Living Adjustment (COLA). Will it hurt your benefits?
-
Financial Pros Provide a Beginner's Guide to Building Wealth in 10 YearsBuilding wealth over 10 years requires understanding your current financial situation, budgeting effectively, eliminating high-interest debt and increasing both your income and financial literacy.
-
Financial Pros Provide a Beginner's Guide to Building Wealth in 10 Years
Building wealth over 10 years requires understanding your current financial situation, budgeting effectively, eliminating high-interest debt and increasing both your income and financial literacy.
-
Five Mistakes to Avoid in Your First Year of RetirementRetirement brings the freedom to choose how to spend your money and time. But choices made in the initial rush of excitement could create problems in future.
-
I'm an Investing Expert: This Is How You Can Invest Like Warren BuffettBuffett just invested $15 billion in oil and gas, and you can leverage the same strategy in your IRA to potentially generate 8% to 12% quarterly cash flow while taking advantage of tax benefits that are unavailable in any other investment class.
-
Integrity, Generosity and Wealth: A Faith-Based Approach to BusinessEntrepreneurs who align their business and financial decisions with the biblical principles of integrity, generosity and helping others can realize impactful and fulfilling success.
-
How Much Income Can You Get From an Annuity? An Annuities Expert Gets SpecificHere's a detailed look at income annuities and the factors that determine your payout now and in the future.
-
Your Paycheck Stops in Retirement, But Your Life Doesn't: An Expert Guide to Planning for a Confident FutureSocial Security will replace only about 40% of your salary, on average. A solid financial plan will help you plug the gap so you can rest easy in retirement.
-
Are You Jeopardizing Your Future to Help Your Adult Kids? An Expert Guide for How to Not Do ThatIf your adult child needs financial help, of course you want to provide it, but crafting a plan that also protects your financial and emotional well-being is vital.
-
I'm a Financial Planner: Here Are Some Long-Term Care Insurance Tips for Every AgeStrategies include adding riders to life insurance for younger individuals and considering hybrid or traditional long-term care policies for those in their mid-50s and 60s.
