Talking to Advisors About the Election

3/1/2020

The 21st Century has been different than previous periods in American history in at least one prominent regard: the constant drum of political rhetoric.
It seems since the controversial election of George W. Bush in 2000 that politics has been an unending strain upon the American psyche, and it has only gotten worse since the election of Donald Trump in 2016. The campaign for the 2020 presidential election seemed to start the day the 2016 election ended, and talk about the upcoming election has ramped up daily in 2020.
There is a reason for that, beyond the constant attention from social media and all-day news television stations. There is a strong belief that the future of the American economy hinges on the outcome of the 2020 election.
Defenders of President Trump believe his reelection will spur further economic growth, and that the election of a Democratic president will kill the American economy. The opposing view is that the election of a Democratic candidate will move the American economy away from a corporate bottom-line attitude and more toward an economic atmosphere of growth for middle- and lower-class citizens.
With those prospects in mind, it is fair to believe investors are wondering just what they should be doing with their investments in anticipation of whatever is going to happen come November.
Spectrem’s year-long survey of investors about political and election issues – Tracking The 2020 Election – asked investors how much they believe the upcoming election will impact their investment portfolio. A majority of investors (57 percent) believe there will be least some impact as a result of the election, and 13 percent believe the impact will be significant.
That being the case, it makes sense that those investors would want to discuss the potential personal financial impact of the election with their advisor, and they do.
Twenty-eight percent of investors said they want to communicate more with their advisor to discuss the ramifications of the upcoming election. That included 4 percent who want to talk to their advisor much more frequently to remain abreast of the potential impact upon their portfolio from the upcoming presidential election.
The Spectrem research shows that there is a near-even split among investors regarding the anticipated impact of a second Donald Trump administration. Forty-three percent of investors believe it will behoove the American economy to reelect Trump, while 35 percent believe a second Trump administration will have a negative impact on the American economy.
The reverse question does not render an identical opposite response. Forty-seven percent of investors believe electing a Democratic candidate to the presidency will have a negative impact on the economy, while 26 percent believe electing the Democratic candidate will have a positive impact on the economy.
There is equal amounts confusion and certainty among investors about the potential impact of the 2020 election, and both types of clients – those who are frightfully uncertain and those who are rigidly sure – need to be addressed by their advisors.
Investors are listening to the election conversation just like everyone else, but they are doing so with an eye toward their own economic future. There are many unknowns which still remain in the election process, and they likely want to know what you know to remove some of those unknowns.