Hail to Your Finances, Regardless of Who Wins Presidency
Don’t try to navigate your investment choices based on election uncertainty. And don’t wait to find out who wins in November to make financial decisions. Instead, take control by sticking to your plan.

There’s a lot of uncertainty about who will win the presidential and congressional elections in November.
Just what the results will mean for individual finances and investments is really anyone’s guess, but many of us are thinking about it. In fact, 72% of Americans believe whoever is elected to the White House will directly impact their personal finances, according to a survey released by personal finance website FinanceBuzz in January, and 32% are putting off a big financial decision until Election Day.
We can’t predict the future, but just what can — or should — we do to mitigate concerns about how the election will impact our finances? There are a few things to keep in mind:
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1. Stay in control
You’re the commander-in-chief of your finances regardless of who’s in the White House, so it’s crucial to focus on what you can control rather than what politicians or pundits say will happen. That includes determining your savings rate, your discretionary spending, your asset allocation and your estate planning. While markets could be volatile, being proactive about identifying your financial goals and how to achieve them can help you ride out storms. Your objectives come first.
2. Avoid being reactive
One of the surest ways to hinder your financial plan is to make knee-jerk reactions that cost you money. Bailing out of investments at the height of the COVID-19 crisis, for example, costs investors billions of dollars in savings. But equally damaging can be paralysis by analysis—overanalyzing a situation to the point where investors struck by fear are moved to inaction.
Keeping a clear head is what’s needed, and focusing on your goals is the best way to stay on track. If you’re a long-term investor, for example, periodic reviews of your asset allocation are important but should lead more to tweaks than overhauls. Meanwhile, for short-term investors or those nearing retirement, a focus on reducing risk in your investments should be a main goal.
3. Ignore the pundits and political theories
There’s a long-held theory that stock markets are generally weakest in the first year of a first-term president. In fact, market indexes were up in the first year of the first terms of the Donald Trump, Barack Obama, George W. Bush and Bill Clinton administrations. More broadly, any forecast of a stock market decline for a president’s full four-year term can’t change the fact that the Standard & Poor’s 500 stock index has steadily increased under every president since Herbert Hoover — and that’s taking into account events like Black Monday in 1987, the 2001 technology bubble, and the 2008-2009 financial crisis.
The bottom line: A single election doesn’t impact long-term investing. Granted, events such as the COVID-19 pandemic can throw a wrench into the machine temporarily, but that still doesn’t change the fact you should remain focused on your long-term goals.
4. Know that any change is slow
Regardless of what candidates say on the campaign trail, any major change in fiscal or monetary policy, outside of black swan or surprise events, takes time to happen.
While politicians can talk about how they’ll take on the economy in their first days in office, most economic policy requires multiple stages of approval. Such changes are slow to enact since they require consensus that’s often difficult to quickly achieve. So rapid reactions to what could take months to settle could prove counterproductive to your financial goals.
5. Make common-sense changes
While it’s crucial not to be reactive, it’s equally wise to plan for economic changes that are realistically possible. After an election, it’s a good idea to take a long look at how federal policies — specifically on taxes — will potentially change depending on whether Democrats or Republicans control either legislative chamber or the presidency.
Consider moving assets from traditional individual retirement accounts to Roth IRAs and other tax-advantaged retirement plans. Life insurance can also serve to protect retirement and other investment assets by covering unexpected future events that otherwise could be a drain on your savings. Additionally, if you’re not in an employer-sponsored 401(k), join one, and take advantage of the company match by making the maximum contribution.
6. Be flexible, within reason
Campaign rhetoric can be maddening. But what’s said on the campaign trail shouldn’t turn you into a financial tactician. That generally doesn’t end well for the investor.
According to a study by financial market research firm DALBAR, the S&P 500 averaged a 10.35% rate of return over 30 years, but the typical mutual fund investor earned an average 3.66% rate of return over the same period. That’s because the typical mutual fund investor shifts from one fund to another thinking they’re timing the market when, in fact, they’re leaving return on the table.
That doesn’t necessarily mean that one should buy and hold for 30 years. It does mean that you should create a strategy that meets your risk tolerance and investment goals and stay the course, seeking counsel and advice regularly to help you keep on track.
Regardless of the market volatility that can occur during campaigns, evidence clearly shows elections only affect your finances if you let them. Make sure you’re the commander-in-chief of your financial house, not whoever is in the White House.
This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. If you would like information about your particular investment needs, please contact a financial professional.
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Salene Hitchcock-Gear is president of Prudential Individual Life Insurance, a business unit of Prudential that offers competitive solutions to meet the needs of consumers through the manufacturing and distribution of a diverse portfolio of life insurance products. An insurance industry veteran with more than 30 years of experience, Hitchcock-Gear joined Prudential in 2017 as chief operating officer of Prudential Advisors, the Company’s national sales organization with more than 3,000 financial professionals, advisors and fee-based financial planners who offer clients a broad range of financial solutions. She became president of the Individual Life Insurance business in 2018.
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