Vote for a Solid Investment Strategy
As a citizen, you may feel the results of Election Day will affect many aspects of life in this country. But as an investor, your situation probably won’t change after the votes are counted.
No matter who wins, the financial markets may well show some politically driven volatility, but that often happens around elections, and it typically doesn’t last long.
But what about the longer term? How might changes in policy and new legislation affect your investment outlook?
To begin, keep in mind that many campaign promises remain just that – promises. And even when some of them are enacted, any actual legislation may be quite different from what was proposed on the campaign trail.
Still, some time in the future, we could see election-related changes that could affect your investment strategy. For example, over the years, we’ve seen many adjustments in the tax rates of capital gains and stock dividends, and it’s likely these rates will change again one day. When that happens, you may need to look at the equities portion of your portfolio to see if you want to make adjustments.
Other changes, though, are hard to predict. Future legislation could affect specific industries, either positively or negatively. Such moves also could influence the way you look at certain investments, but if you have a diversified portfolio that contains a broad mix of stocks, bonds and other securities, any actions affecting one particular industry probably won’t cause you to significantly adjust holdings invested in other sectors.
In any case, while it may be a good idea to keep an eye on tax rate changes or how new policies may affect different market segments, your main emphasis in terms of your investment decisions should remain on your goals and what you need to do to achieve them.
At least once each year, review your portfolio carefully to make sure your investments are aligned with your goals, whether they are short-term (a new car, a long vacation) or long-term (college, retirement). You may need to evaluate your goals periodically to ensure they’re prioritized appropriately to help keep you on track toward achieving what’s most important to you.
Over time, your goals may change, too. Perhaps you’ve decided that instead of retiring early and traveling around the world, you now want to turn your hobby into a business. Changing this goal may require a different investment strategy.
Or you might change your mind about where you want to live. Instead of staying in your home, you might downsize to a different area. When goals change, you may need to update your investment strategies.
Here’s the key point: You’re the one electing to make these changes. No matter what happens in this or any other election, be sure to “vote” for the strategies that have the potential for a winning outcome.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor. Edward Jones, Member SIPC.
Kevin Chancellor is a licensed financial advisor who manages the Palm Bay branch of Edward Jones. He specializes in helping individuals, families, and business owners in the areas of retirement planning, tax savings, estate considerations, and education savings. He has served as board chair for the Greater Palm Bay Chamber of Commerce and works with various charities throughout the county.
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