Investment Implications of the Elections

The elections are finally over.  We find that it is policy, not politics, that matters when it comes to investing.  With President Biden now in the White House, supported by a narrow Democrat majority in Congress, new policies could impact how markets and your investments react.

 

Here are the major themes that we see:

  • Increased government spending
  • New approach to foreign relations
  • Economic recovery
  • Inflation pressure

Our top portfolio ideas in this environment include the following:

  • Diversify - We recommend balance and diversification, both to manage downside risk and seek multiple sources of return.
  • Seek relative value – We have identified asset classes that we believe offer value relative to other investments and to their historical prices. We think small- and mid-cap stocks, value stocks, and foreign stocks are attractive.
  • Plan for inflation – We believe the risk of inflation is rising, so we want some exposure to investments that might benefit as the economy recovers, such as commodities and real estate.
  • Target tax-free income - Municipal bonds are attractive in our opinion.
  • Benefit from trends – We believe innovative stocks in the health care and technology sectors are attractive. Additionally, we recognize the benefits to socially responsible investing.

There are also implications for financial planning.  Now may be an excellent time to speak with your advisor about:

  • Risk
  • Taxes
  • Retirement planning
  • Estate planning
  • Insurance

Signet is here for you.  For questions or assistance with your investment planning or to discuss the points in this article, please speak with your advisor.  For those not yet working with Signet, please let us know if we can schedule a free portfolio review.

IMPORTANT DISCLOSURE

Past performance may not be indicative of future results. Different types of investments and investment strategies involve varying degrees of risk, and there can be no assurance that their future performance will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. The statements made in this newsletter are, to the best of our ability and knowledge, accurate as of the date they were originally made. But due to various factors, including changing market conditions and/or applicable laws, the content may in the future no longer be reflective of current opinions or positions. Any forward-looking statements, information and opinions including descriptions of anticipated market changes and expectations of future activity contained in this newsletter are based upon reasonable estimates and assumptions. However, they are inherently uncertain and actual events or results may differ materially from those reflected in the newsletter. Nothing in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice. Please remember to contact Signet Financial Management, LLC, if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and/or services. No portion of the newsletter content should be construed as legal, tax, or accounting advice. A copy of Signet Financial Management, LLC’s current written disclosure statements discussing our advisory services, fees, investment advisory personnel and operations are available upon request.

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