Election day has come and gone, and here we are still without a clear winner for either the White House or the Senate. With recounts, lawsuits, and run-offs pending, it appears the holidays could also come and go before we have any clarity. Expecting a split of the White House and the Senate between the two parties (therefore a balance of power), the markets have reversed the negative trends leading up to Election Day. Markets appear to be hoping for and embracing the potential “gridlock” and the low probability of any significant tax reform or other changes due to campaign promises.
Despite the political uncertainty, additional economic stimulus will remain a focus to keep small businesses open, unemployment trending lower, and the economy on the recovery track. As you’ve probably noticed, holiday sales have already started as retailers are anxious to move inventories due to fears of state-mandated lockdowns and lower than average foot-traffic this holiday season. Record-breaking progress towards an approved and working vaccine will continue to cause both emotional and economic volatility. The Fed continues to provide its support and a safety net until a stimulus package can be implemented.
As we all prepare for the holidays and our year-end financial routines, we will continue to monitor how political events may impact our portfolios and the investment landscape. We will also analyze our portfolios in order to optimize tax outcomes for the year. However, a delayed and potentially split outcome of the election will likely postpone or even remove the need for any significant tax or estate planning until we have more clarity. But we will reach out to have conversations where planning is warranted. We remain confident in the integrity of our investment portfolios and the insurance provided by diversification across asset classes and public and private investments. We also continue to seek new opportunities during such turbulent times.
Please do not hesitate to contact us with any questions or if you want to get a jump on year-end planning. Otherwise, we hope you have a stress-free and relaxing weekend.