President's Letter - Will it be " The Economy, Stupid?"
A common belief about elections is that it is ultimately the economy that decides who will win the election. While the election is still almost 11 months away, if the common wisdom identified above is true, the outlook for President Trump should be pretty good. But despite the positive outlook for the economy, investors are somewhat reluctant to commit their vote to President Trump at this particular time.
When asked whether the economy will be better, worse or the same over the next 12 months, 30% of investors indicate that they believe the economy will be better while 42% believe it will be the same and 28% think it will be worse. The outcomes vary significantly by political preference. Fifty-two percent of Republicans think the economy will be better compared to 11% of Democrats and 22% of Independent voters. Forty-one percent of Republicans think the economy will be the same in the next 12 months, along with 43% of Democrats and 44% of Independents. Only 8% of Republicans think the economy will be worse in the next 12 months compared to 46% of Democrats and 34% of Independents.
As you can see, investors are somewhat positive about the economy but not overwhelmingly so. When asked who they will vote for in November, 34% of investors plan to vote for President Trump while 41% indicate they will vote for the Democratic nominee. It is important to note, however, that 23% of investors remain Undecided. For more in-depth information take a look at our new free monthly white paper regarding the election entitled Wealthy Investors and the Election: A Guide for Financial Advisors in 2020.
If investors aren’t necessarily identifying the economy as a critical election issue, there are other issues that identify key differences between investors of political affiliations. Some of the issues with the biggest differences between investors include "raising the minimum wage", the "Green New Deal" and "forgiveness of student loan debt".
Two other key issues concern investors - one of which investors of all political affiliations agree upon. All investors support "tax cuts for middle class investors" but they are torn regarding "a wealth tax on billionaires".
Throughout 2020 Spectrem will be tracking key investor attitudes regarding the election and will report on any changes to key attitudes. Investors are concerned about the outcome of the election on their portfolios. Advisors would be wise to continue to be informed about various issues related to the election to the extent an investor may believe it will impact their portfolio.