This year’s election cycle has been filled with an unprecedented level of hype. The battle for the White House has elevated emotions everywhere, and media outlets have been filled with headlines predicting sweeping policy changes and potential market volatility. To continue to grow and protect your assets, it’s critical to differentiate between what truly matters and what’s just noise. To help, here is our short list of what to prioritize and what to ignore so you can avoid the distractions and head into 2025 with confidence—regardless of the outcome in November.
Policy Changes
It’s true that elections often shape tax, regulatory, and economic policies—all of which have the power to impact your financial planning. The provisions in the Tax Cuts and Jobs Act of 2017 are set to sunset in 2025, and it will be up to the new administration to either push to extend those changes or allow them to expire. While tax reforms may well impact your income, estate, corporate, and capital gains taxes, passing them can be challenging, so they usually occur gradually rather than immediately. Rather than panicking about what might happen, take steps to prepare for whatever lies ahead.
What to Prioritize:
Tax planning…
If needed, make adjustments to your tax plan with a proactive but flexible approach. Explore options like accelerating income or deferring deductions based on anticipated changes to your tax rate. Most importantly, remember that tax planning is a year-round marathon—not an election-season sprint.
Interest rates…
While the Fed operates outside the political arena, fiscal policies that follow elections can lead to broader economic shifts that impact the Fed’s future monetary policy. When (and only when) change happens, it’s important to assess the impact of rates on your borrowing and lending strategies, fixed-income holdings, and real estate investments.
What to Ignore:
Headlines predicting immediate legislative impacts…
Keep in mind that policy implementation often takes months, if not years, to roll out. By ignoring speculation, you can avoid unnecessary stress and the often-negative impact of hasty financial decisions.
Market Volatility
It’s very common for markets to experience short-term volatility immediately following presidential elections. This volatility is usually temporary, smoothing out over time as the new administration’s actual policy proposals become more understood and the campaign rhetoric around them becomes a distant memory. Because broader economic fundamentals tend to have a more significant influence than election outcomes, these blips are highly unlikely to have any impact on your portfolio or your finances.
What to Prioritize:
Focusing on your long-term investment strategy…
Keep your eyes on the investment objectives that drive your strategy rather than short-term market noise that can lead you astray. The fundamentals that drive stock prices—earnings, cash flow, and business growth—don’t change overnight based on election results. Neither should your carefully constructed investment strategy.
Rebalancing opportunities…
Election-related volatility can present opportunities to rebalance your portfolio, whether by adjusting equity positions, capturing tax losses, or reinvesting in undervalued assets. At LCM, we consistently rebalance our portfolios to create a diversified mix of assets that mitigates risk during periods of uncertainty. For details about how this process helps smooth volatility to grow and protect your assets, see our blog post: The Art of Balance.
What to Ignore:
Sensational headlines about potential crashes or rallies tied to the election results…
Economic fundamentals like corporate earnings, global demand, and supply chains play a much larger role in market performance over time than political outcomes. Buckle your seatbelt for short-term fluctuations, but expect them to be temporary.
Estate Planning & Philanthropy
Election outcomes can result in policy and legislative changes that require adjustments to your estate planning strategy—especially in the areas of estate tax exemptions and charitable giving strategies. While basic estate planning principles will not change, reviewing your estate and strategic giving plans is wise in the face of any change that may impact how your money works for you and the people and causes you care about in the future.
What to Prioritize:
Reviewing your estate plan…
Your estate plan should be a living document that is adjusted to reflect changes in your finances or wishes. If changes seem likely, you may want to consider adjusting your existing exemptions, gifting strategies, or trust structures—just be careful to avoid drastic measures until any key policy changes are confirmed and enacted.
Philanthropy…
Your charitable giving strategy should always be aligned with your personal values and legacy goals. Changes to tax laws might enhance or reduce deductions, so maintain flexibility while letting your mission guide your approach. Need help creating a strong strategy that aligns with your goals and values? Email us to request a complimentary copy of Gideon’s book, Giving: A Handbook to Happiness for the Modern Philanthropist. You can also click here to download the accompaniment, “The Workbook for Giving”.
What to Ignore:
Pressure to shift your donations based on election outcomes…
Philanthropy is a personal decision that should be guided by long-term impact rather than short-term trends. Be thoughtful about any changes to your strategy and ensure they align with your goals, timeline, and resources.
Looking Beyond November 5th
As the clock ticks on until election day, remember that successful wealth management thrives on a long-term approach and a balanced perspective. Policy changes and temporary market shifts are nearly as certain as ‘death and taxes,’ but they are just two of the many factors shaping your financial future. At Leisure Capital Management, we are dedicated to helping you navigate the path ahead and ensure your wealth strategy remains resilient and on track, no matter the political landscape. If you have any questions at all about how upcoming policies might impact your portfolio, please don’t hesitate to reach out. Let’s keep the focus on what matters most: growing and protecting your wealth so you have the freedom to live the life you choose with confidence.
