What impact will the elections have on your financial future? [Well, frankly,] regardless of which side of the political fence you stand on, the prospects of your retirement are much more likely to be impacted by your personal actions than by the actions of Washington politicians.
The comments above and below are excerpts from an article by Wade W. Slome (InvestingCaffeinewhich has been edited ([ ]) and abridged (…) to provide a faster and easier read.
… The influence of presidential elections on your finances is ineffectual…
- Over the last four decades, stock prices have gone up and down during both Republican and Democrat presidential terms.
- The picture looks much the same, if you analyze the fiscal performance of conservatives and liberals since 1970 – debt burdens as a percentage of economic output have risen and fallen under both political parties.
- No matter who wins the presidency, many investors forget the ability of that individual to affect change is highly dependent upon the political balance of power in Congress. If Congress holds a split majority in the House and Senate, or the opposition party commands the entire Congress, then the winning presidential candidate will be largely neutered.
Rather than panic over a political loss or celebrate a candidate’s victory, here are some tangible actions to improve your finances:
- Organize. Typically individuals have investment and saving accounts scattered with no cohesive accounting or strategy.
- Get your financial house in order by gathering and organizing all your accounts.
- Budget. Spend less than you take in or, in other words, save. You can achieve this goal in one of two ways:
- [by] cutting your spending or
- [by] increasing your income.
- Create a Plan.
- When do you plan to retire?
- How much money do you need for retirement?
- What asset allocation and risk profile should you adopt to meet your financial goals?
If you have difficulty with any of these actions, then meet with an experienced financial professional to assist you.
Politics can trigger very emotional responses but realizing your actions have a much more direct impact on your finances than political Facebook rants and temporary elections will benefit you in achieving your long-term financial goals.