Will this year’s presidential election impact your pocketbook? What will it mean for your long-term investments like your retirement?
“The market is probably going to take a pause over the next few weeks and then we don’t know. We just don’t know what’s going to happen whether President Trump wins or whether former Vice President Biden wins,” Joel Johnson, a certified financial planner with Johnson Brunetti, said.
Johnson said it’s not a partisan issue, but more about what types of policies either administration might propose.
“The pandemic is probably a bigger issue than another Trump presidency. However, if Biden wins there have been some statements made that could be negatives on the market long-term.”
If some of the tax cuts are rolled back or some of the environmental and financial regulations are changed, Johnson said, then the market may respond negatively.
“It’s uncertainty that causes turmoil in the markets and overall that’s a short-term issue. Overall, it’s what’s really happened with the economy,” Johnson said.
Brian P. Sullivan of Fiscal Dynamics another financial planning firm, said he’s only had one client ask what the election will mean for their retirement.
“if you remember the day after Trump was first elected the markets tanked, but then in the same day came back and rocketed up,” Sullivan said
Sullivan urges a cautious approach for retirement investors.
“Nothing should be of great concern to someone. So the idea of selling out of your retirement account is probably not a good idea,” Sullivan said.
Whatever impact the election has on the market will likely be a blip, experts said,
“So I think we get a lot of anxiety built up, a lot of tension built up on what the markets do in the very short-term, that’s kinda not how we should be investing. We should be investing in kind of five-year chunks,” Sullivan said.
Both Sullivan and Johnson said before you withdraw any money from your retirement account you should talk to a financial planner.
“The worst risk an investor faces is their own behavior. And the closer we get to retirement, emotionally those stakes get high. The fear is greater when we’re scared and the greed is greater when we feel like we’re missing out,” Johnson explained.
He added: “We’re almost always wrong when we act on emotion.”