Perspective Matters
It's early morning after Election Day in the United States. Like many Americans, I'm surprised we already know the presidential election results. While I have personal views about various outcomes across the country, I'm writing today as a financial planner to focus on what these results could mean for you and your finances.
WHAT WE KNOW RIGHT NOW
Donald Trump has been reelected as president of the United States, and the Republican Party will maintain control of the Senate. The House of Representatives' control remains undecided, and we may wait several weeks for final results, particularly due to California's election procedures.
Many states voted on significant ballot initiatives covering:
• Reproductive rights
• Minimum wage requirements
• Paid leave for hourly workers
• Marijuana regulations
• Voting procedures
• Immigration laws
• Protected class protections
Interestingly, voters showed independence from party-line voting. For example, several states voted to protect reproductive rights access while simultaneously electing officials who oppose such protections. Similarly, many states supported worker-friendly initiatives while choosing representatives who typically oppose these measures.
FEDERAL IMPACT AND REGULATORY ENVIRONMENT
With Republican Senate control, the Trump administration will likely face few obstacles in securing cabinet and judicial appointments. We can expect judicial nominees to continue coming from Federalist Society recommendations, while cabinet appointees will likely favor reduced federal government involvement in daily life.
While reducing bureaucracy sounds appealing—we've all experienced frustration with simple tasks like getting permits for home improvements—we should consider the broader implications. The administration may further reduce regulations on food safety, medications, and water quality. During Trump's first term, we saw examples of regulatory changes, such as relocating Department of Agriculture agencies from Washington to Kansas City, resulting in significant loss of experienced staff. Given the recent Supreme Court decision overturning the Chevron doctrine, we may see continued reduction in regulatory oversight.
This could mean:
• Fewer quality control measures
• Need for increased consumer vigilance
• Potential for more safety incidents
• Possible boost to corporate profits
• Greater stock market performance
• Increased risk of product quality issues
ECONOMIC OUTLOOK
While certainty is impossible, I believe rational thinking will prevail now that the election is behind us. Two major campaign promises deserve careful consideration:
1. Immigration Policy: Despite campaign rhetoric about mass deportations, I am cautiously optimistic that practical and legal constraints make this unlikely. Millions of critical jobs are filled by undocumented workers, and current law prohibits using the military for domestic law enforcement. I am hopeful that business leaders will likely successfully argue against drastic immigration actions that could harm the economy.
2. Trade Policy: Similarly, while across-the-board tariffs were promised, I am hopeful that business leaders will convince the administration that such measures could cause lasting economic damage. These proposals may have resonated with voters feeling economic pressure, but their implementation would risk significant economic disruption.
MARKET RESPONSE AND INVESTMENT STRATEGY
Currently, we're seeing:
• Positive reactions in U.S. equity markets
• Cautious bond market response
• Pessimism in emerging markets
I'll closely monitor statements and actions from likely administration officials. If my optimism about rational decision-making proves incorrect, I'll recommend portfolio allocation adjustments to weather potential market volatility. While I've long advocated for broadly diversified global positions, we may need to reassess this approach before the 2026 midterm elections.
NEXT STEPS AND TRANSITION PERIOD
The outgoing Biden administration's actions over the next 90 days warrant attention, particularly given recent Supreme Court rulings on presidential immunity. President Biden might take steps to strengthen institutions against potential changes in the next administration.
INVESTMENT PRINCIPLES REMAIN SOUND
For now, we're maintaining our current positions.
Core investment principles still apply:
• Keep any funds needed within two years safe and liquid
• Maintain long-term portfolios focused on managing inflation and longevity risks
• Expect short-term volatility while maintaining long-term perspective
INVESTMENT PRINCIPLES REMAIN SOUND
If you're not currently working with a Certified Financial Planner™ professional, this period of change makes it an excellent time to consider doing so. CFP® professionals continuously monitor fundamental investment and planning principles while considering global economic contexts. Feel free to schedule a conversation using the link below if you'd like to discuss your specific situation.
Neither Prism Planning and Solutions Group nor Insight Advisors provide tax advice, and nothing in this communication should be treated as such. This communication should not be interpreted as a recommendation for a specific investment or tax-
planning strategy. We are providing this material for informational purposes only. We have made every attempt to verify that information contained in this communication is accurate as of the date published but make no warranties. Before making any decisions related to your own tax and/or investment situation you should consult the appropriate professionals.
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