Since he has no political track record, President-elect Donald Trump is causing uncertainty in financial markets, therefore, many investors have adopted a wait-and-see attitude while they speculate on how his policies will impact the stock market, housing costs and the average American’s financial health. JEHM Wealth & Retirement takes a look at your money and a Trump Presidency, as we are one month away from his inauguration.
The Stock Market
On June 2016, President-elect Donald Trump supposedly sold all of his stock, saying that “in a big, fat, ugly bubble” during the first presidential debate, referring to the same stock market bubble he warned The Hill about in 2015 when he warned small investors would suffer losses out in an inflated stock market. Trump’s bubble isn’t evident yet, in the weeks after the election stocks have soared and the Dow Jones Industrial Average registered record closes.
Historically, the stock market’s performance has not been dependent on whether the President is a Republican or a Democrat. Candidates make bold claims while running, however, if Trump not receive support from Congress, he may not be able to implement his objectives. Basing a stock portfolio on who is in the Oval Office is a poor investment strategy.
When Donald Trump spoke to the National Association of Home Builders, he said “Twenty-five percent of the cost of a home is due to regulation. I think we should get that down to about 2 percent.” If the President-elect, whose father built homes, is able to ease over regulation of the home building industry, prices of new homes should decrease. Home ownership is at its lowest rate since 1965, with home builders saying they cannot build affordable new homes due to the added costs of excessive regulations.
In a bit of good news for the average middle-class American, Trump’s promise to cut federal income taxes will likely happen with a Republican-controlled House and Senate, although lawmakers may scale back cuts amid concerns about government debt. Even Forbes is suggesting that if a person can legally delay getting paid for work until 2017, they will pay a lower tax on the income. While employees cannot do this, independent contractors can specify that they would like to receive their payment next year before beginning an end-of year assignment.
Health Insurance Prices
Uncertainty surrounds several of Trump’s proposed policy changes, such as the repeal of the Affordable Care Act. It’s unlikely that he will be able to scrap the Act entirely, nevertheless, Money reports health insurance subsidies will probably go away. Considering that insurers have clauses that allow them to discontinue coverage if the subsidies stop, a number of people may have to shop for new health coverage, however, the mandate to have health insurance will also very likely end.
While it is tempting to go out and Trumpify your portfolio with stock in home builders and defense companies, since Trump also wants to bolster the nation’s military, JEHM Wealth & Retirement reminds you to diversify your investments and adjusting them to a comfortable risk level each year.
Eric and Jennifer Lahaie
JEHM Wealth & Retirement
Sources: Hyperlinked In Article
Copyright © 2016 JEHM Wealth and Retirement Strategies
Investment Advisory Services offered through Retirement Wealth Advisors, (RWA) a Registered Investment Advisor. JEHM Wealth & Retirement Strategies and RWA are not affiliated. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.
This information is designed to provide general information on the subjects covered. Pursuant to IRS Circular 230, it is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that JEHM Wealth & Retirement Strategies and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney.
Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Any comments regarding safe and secure investments, and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way to securities or investment advisory products. Fixed Insurance and Annuity product guarantees are subject to the claims‐paying ability of the issuing company and are not offered by Retirement Wealth Advisors.