Envelope please! And the winner is …. the investor who did not get caught up in the deafening noise of the election. The same person(s) who has a clear vision of some basics like: risk tolerance, goals and objectives, realistic income needs (and the stable sources to meet them), and some qualified guidance to monitor all the above. I concede that as a Certified Financial Planner™ Professional I may preach these basics into the ground. However, I’ve seen chaos come and go, elections contested, undeclared wars (real combat), economic cycles ride their roller coaster, etc. etc. – some basics have never changed.
It is true that some fine tuning along the way makes sense. Paying attention is absolutely necessary (or delegating that to the proverbial Trusted Advisor). For example, if you think your taxes are going up it pays to look at the after-tax returns of tax-free or tax-deferred strategies. If you own highly appreciated stocks and aren’t living off the dividends, you might make your charitable deductions with some of those shares rather than after-tax cash. Smart money management suggestions are far too numerous to list.
There are also stocks that will do well regardless of who or what political party is in power. Both are going to have to face infrastructure spending needs and most of their constituents want to eat every day. I think you get the point. The winner is the person who drowns out the noise and sticks to his or her plan. Somewhat like the pitcher in the final game of the World Series who can still throw pitches that batters can’t hit.
Having said all the above, it does seem sensible to watch trends and bounce ideas off of well-informed people. A word of caution – avoid the “tip of the day” from talking heads on cable shows. Statistics show their long-term record is dismal. If they were so smart, they sure wouldn’t be sharing ideas with the public. Their job is to sell advertising – not help you build or protect a nest egg (what do they know about your fundamental objectives anyway!).
However, there are potentially lucrative trends that may trigger opportunities to evaluate. Some examples: The COVID-19 Pandemic seems to be with us for a while. Apparently when people spend more time at home, they see things around their house that just have to be changed. Who profitably provides home improvement products? Who makes all that plexiglass that provides protection between customers and product providers? (I don’t know about you, but I have trouble hearing someone shouting through a mask while standing behind plexiglass!) At some point – hopefully soon – the vaccine distribution business is going to be red hot. Who will do that in a manner that produces growth and/or income? You have as good of a vantage point as I to look for the changes that will constitute a “new normal.” Another word of caution: there will be winners and losers participating in any new trend. And many trends fizzle once the triggering event(s) pass. For example, video conferencing is a booming industry as multitudes work remotely. Someone(s) is doing that very profitably. In a “new normal” will they still be in high demand – or will hordes of people go back to their offices drastically diminishing desire for their service? That will be interesting to see.
In the meantime, we need to celebrate each other. I am truly uplifted by all those who are calling for unity/ reminding us that we are all Americans and blessed to be living in the greatest nation on the planet. Let’s remember a clever quote attributed to Winston Churchill, “Americans can always be trusted to do the right thing, once all other possibilities have been exhausted.” I think he was right.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful. Performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Investing involves risk including loss of principal.
Visit us at www.williamsfa.com. Tommy Williams is a CERTIFIED FINANCIAL PLANNER™ Professional with Williams Financial Advisors, LLC. Securities offered by Registered Representatives through Private Client Services, member FINRA/SIPC. Advisory products and services offered by Investment Advisory Representatives through RFG Advisory, a Registered Investment Advisor. RFG Advisory, Williams Financial Advisors, LLC and Private Client Services are unaffiliated entities. Branch office is located at 6425 Youree Drive, Suite 180, Shreveport, LA 71105.