Post-Election, Are You Focused on Malaise or Opportunity?

In a sense, we need to be true to our own Constitution - our personal "Financial Constitution". In other words, what beliefs are most important to you? Most of us value many of the same things: Our careers. Our families. Our wealth. Most of all, it is about individual freedom to pursue what we want in life.

So, while the election continues to dominate discussions, investors are best served by keeping their politics out of their portfolio. I want to acknowledge two recent game changers that are impacting markets. First, we are seeing a reaction to news of two different COVID-19 vaccines that will provide a step toward being back to normal. We now see Wall Street gravitating toward things that represent this sentiment – banks, etc. Even though we have also seen record new cases of the disease, many understand it is always darkest before the dawn.

The second game changer is the likelihood that the US will be moving forward (regardless of the final winner) with a divided government. This provides a good example of how the balance of power is to work. With a divided government, we see greater controls on government spending, an opportunity for bipartisan (and longer lasting) reforms and even less likelihood of war.

How do you take advantage of these game changers? If you are looking at new opportunities, you continue to think in terms of the great acceleration we spoke of in our last issue. New technology like 5G is front and center in the new world economic expansion. While most of the world’s technology giants are still here in America, our position in this new technology is threatened by foreign firms like China’s Huawei.

Now is when you need to know who your trusted advisors are. A good advisor can help guide you while the 5G battlefield takes shape, and help sort out the winners and losers. The 5G explosion represents a whole new gateway to the future, and its impact will rival, if not surpass the dramatic introduction of the internet in the 1990s.

Certainly, there has been investor anxiety in 2020. This election has compounded fears already ignited by COVID-19 and its impact on America’s health, economy, and financial markets. It has caused many investors to get out of the stock market, even as it climbs. Others are prone to financial decisions that have practically nothing to do with the election.

Much of the current angst is really more about sentiment, not about fundamentals. As we look to next year, other things may matter more than the concern over who’s in the White House. As of now, there isn’t compelling evidence to make portfolio changes based on election outcome.

The great acceleration that we have been experiencing in innovation and new technology should not be altered in the short term. We will have time to process events (and policies) as they occur, and with the help of your trusted advisor you can adjust accordingly.

With such an exciting future ahead, when someone is bold enough to press me on how I may have voted, my answer is simple: I voted with the principles of the Constitution in mind.

Thanks for reading.
Dave