How does the presidential election affect our economy?
Up until the presidential election results of 2020 finally revealed Joe Biden as the president-elect, it was as if the entire nation had been holding its breath. The markets appeared to freeze in place, only geared to move once the nation clearly knew who had won. As the counts started revealing Biden as the winner, investors started to see the opportunity.
Biden is set to be the next president, Democrats still control the House and Republicans have a strong chance of holding on to the Senate. What does all of this mean for the economy, and what has investors feeling encouraged? It is because things in the government will be at a bit of a standstill.
How a presidential election affects the economy
It is not so much just the presidential election that affects the economy as much as it is the entire election. The House, Senate and other governmental positions have an effect as well. Because the power is divided among the House, Senate and White House, investors can have more confidence that taxes will not sharply rise.
Additionally, split government usually means there is less government spending. This helps keep bonds at a steady rate rather than becoming volatile or unpredictable. However, as interest rates go back up, bond prices will likely go down. A blue wave or a red wave that sees one party gain a significant portion of power would have meant they would have more effects on taxes, but with a split system like it appears we will have, investors are ready to build back up a bull market.
Talk to a ProVise CFP® professional about managing your finances through difficult seasons
Whether or not it is an election year, you need to be making the best investment and financial decisions you can to help you save for retirement and support yourself and family now. At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can work closely with you to help you make a personal financial plan that is flexible enough to get you through unpredictable seasons, such as a presidential election.
Our team can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.
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