Financial fallout from election results
LEXINGTON, Ky. (WKYT) - It’s a big week for politics. A country seemingly very split over who should be President of the United States of America comes down to the wire. To sort out how this impacts the stock market, independent financial planning advisor Josh Smith of Strategic Wealth Designers joined the newscast. He says it’s not to expect this election to go down with the same normalcy we typically see.
“To use the word of the year, this is unprecedented. We could see a situation where there are numerous states who we don’t have any kind of indication on for several days,” Smith says. “I hope that isn’t the case for the sake of the stock market given the uncertainty and the skepticism that would build if that happened, but it certainly may play out that way.”
Numerous media outlets ran stories citing various sources that one candidate would be good for the stock market over the other. Each creating points of why the other was the best option for Wall Street. Smith says that in reality, the stock market won’t be affected near as much by the winner of the election as it will by the continued coronavirus headlines. He says the economy is a much bigger factor for the market than which person is elected.
“Don’t get me wrong, the election matters a lot, especially if things get held up in courts or people were to go out and riot in the streets,” Smith said. “Hopefully that doesn’t happen and wiser actions prevail. The real problem is the virus and how the government handles the situation. If we see shutdowns again we will see the market react negatively and swiftly. Many sectors have taken a beating already this year and going backward will exacerbate the problem.”
For the balance of the markets, a definite answer soon after the election of who won will be key. The longer uncertainty hangs over the nation, the greater seesaw there will be in the stock market. Smith says it’s very important to take a look at what you have in your portfolio and find ways to put further safety in place, especially if you are in or near retirement.
“I say it a lot but you can’t afford a big loss when you are nearing or in retirement,” Smith says. “Far too often I see investors in the latter portion of their life sitting in an investment structure that has 70 or even 80% of their holdings in risky investments. You have to put safety nets in as you approach retirement, so when the stock market does take a dive, you don’t feel the pain of those losses.”
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