What Is the Election Going to Do to My Investments?

Markets ETF Trends

Note: This article is courtesy of Iris.xyz

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By Rick Kahler

As we get closer to election day, the most common question people ask me is,“What is the election going to do to my investments?” This is usually followed by, “If ___________ is going to be elected president, don’t you think I should get out now while I have a chance?” It really doesn’t matter whether the blank is filled in with Clinton or Trump; many people think one or the other will mark the death knell of the economy.

I’ve witnessed these same concerns in other presidential elections over my 35 years as an advisor. People are always worried that if the candidate they dislike becomes president it will be devastating for the markets and their portfolio.

Are there some precautionary measures you should take to protect your retirement portfolio from an election day disaster? Let me share what I am doing in my personal portfolio to prepare for the worst: nothing. I don’t believe that whether Clinton or Trump wins will make any long-term difference to a diversified investment portfolio or the US stock market. There is no past evidence to suggest otherwise.

I would expect most investment advisors to agree with me. But according to an article by Michelle Zhou in Financial Planning on September 13, 2016, “Election jitters have advisers seeking liquidity for retirement plans,” I was surprised to find this is not the case.

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The magazine asked 320 advisors, “How will the outcome of the U.S. election impact retirement planning, and what actions are you taking now?” I want to emphasize that the question focused on the impact to retirement portfolios, which inherently are long-term in nature. This wasn’t a question about how to play the market immediately before or after the election.

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