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The Election: How Will It Affect Your Portfolio & Financial Freedom

Posted by kdadmin on October 20th, 2016.

The Election: How Will It Affect Your Portfolio & Financial Freedom

The consistent advice I get from every attorney I work with is to never write about politics or religion. So, I’ve stayed out of this election year, leaving the train wreck to all involved.

MAN, I’m glad I did. Another incredibly useful thing I’ve gleaned from attorneys.

But, a lot of people, including my clients, have asked about the sort of impact that each contestant could have on a person’s investment portfolios in the event of the contestant’s election. So, between you and me, the real answer is...

Mu.

The Japanese term, mu, is a key idea in Zen Buddhism. Derived from the Chinese (wu), It essentially means, “not have, without.” It was developed as a way to respond when a question is false. For example, if someone were to ask you, “Have you stopped beating your spouse?” Answering either, “yes” or “no” would still confirm that you had been beating your spouse. But, by responding with “Mu,” you negate the question.

The Election: How Will It Affect Your Portfolio?

The only answer here is, “Mu.”

This question is false. Contrary to the mindless chatter onCNN Money, with its tacky, hyped up, can’t see the forest for the trees, single metric based approach to financial “journalism,” this question doesn’t really have an answer. This question assumes that the party of the person in office will have a large impact on the long term performance of the market. This is simply not true.

As you may have figured out, politicians love to take credit for things that happened while they were standing there, but that were actually set in motion years, sometimes decades, before they showed up for office in their shiny new suits. So do the supporters of politicians. So do voters. So does the media. But that doesn’t make it true.

Presidents who were in office during financial booms, or busts, were NOT the primary cause or effect of those financial seasons. No, not even Ronny Reagan or Billy Clinton. Sorry.

Even the best economic research firms can only answer this question with silly applications of daily equity premium risk against leading poll indicators. Sure, they came up with a number. Sure they pointed out some of the most egregious economic weak points in each contestant’s platform. but that doesn’t mean that their end result of “if Hilary, +4%, if Donald, – 7%” really holds any intelligent, portfolio decision basing, long term projectionary value. In my estimation, these things are great tongue in cheek ways to answer a false question with false logic.

The Election: How Will It Affect Your Financial Freedom

Look, I’m not trying to be a kill joy, but this is serious. Money is serious. Investing is serious. Investing so that you have enough to live the life you love, with those you love, for the rest of your life, should not be hung upon, or rely upon, something as infantile, brainless, and middling as a presidential election. Your portfolio, and your entire financial life, must be built to withstand the boobery of the world around you. THAT is security. THAT is financial freedom.

There are six leading economic indicators that offer FAR BETTER reference points for your portfolio. I talked about one of them, GDP, two days ago. How do you think I and my clients were able to avoid the majority of the 2008 meltdown? Leading. Economic. Indicators. This is how the market works.

Our political system is a SYSTEM not an oligarchy. If it takes a village to raise a child. It also takes a village to run a country. So, as much as the media and the political marketing machine would like you to think that the contestant who is president really matters all that much for you money, it doesn’t. In fact, your portfolio should be built to be immune to whichever contestant is in office at the time.

The Bottom Line: Get Your OWN House in Financial Order

Sure it’s fun to play voyeur and look at the insane lives of the politically engaged. But trying to peg the winning contestant’s “return” to your portfolio is silly at best. In the end, regardless of which contestant gets in and pushes whichever parts of their agenda too far, you would be best served by getting your own house in financial order. By that, I mean:

  1. Create your OWN budget. Balance it. Live with a surplus. Invest it in YOUR portfolio.
  2. Review your OWN contingency plans (powers of attorney, wills, beneficiaries, etc.).
  3. Review your OWN insurance coverage. Do you have the right types, in the right amounts, protecting the right people, for the right reasons? Are you sure?
  4. Take stock of your social agenda. Are you really doing all the things you want to be doing in order to live the life you love? Or, are some of them just unfulfilling habit?

While it can be important to know what a contestant is going to do for you, it’s FAR more important to know what YOU are going to do for you.

The Next Steps?

Create your OWN budget. Balance it. Live with a surplus. Invest it in YOUR portfolio.

Use my guide to get you started. Then call me and I’ll help you out with the rest.

Financial Budget

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