Traversing post-election markets
By Kristin Hovencamp
The market loves a divided government. There is a Wall Street saying that bad certainty is better than uncertainty. A split Congress and White House are the type of gridlock in Washington, D.C., that is excellent for the U.S. economy, notes Jeremy Siegel, Professor of Finance at the Wharton School. Additionally, checks and balances provide the market with less uncertainty, net positive for stocks.
Are investors betting on gridlock? Possibly they are. With the election behind us, now is an excellent time to review your capital market assumptions. Reassess your strategic and tactical approaches to equity and bond weightings. Fluctuating financial markets may present investment opportunities, and you can take advantage of the trends.
In the upcoming year, a change in economic policy may cause a shift across portfolios. Periodically analyze your holdings. Confirm your investments are in alignment with your intended objectives. If the investments are out of balance, then it’s time to rebalance. Where can you reduce positions that have grown disproportionately and add to underweight positions? Rebalancing is a smart tactic to help maximize your risk-and-return relationships while maintaining appropriate portfolio diversification.
In a post-election economy, everything feels uncertain. Focus on two things most impacting your long-term objectives and immediate goals: health and money. We all need checks and balances. “What can be added to a man who is in health, out of debt, and has a clear conscience?” –Adam Smith
Kristin Hovencamp is an Investment Executive and Director of Business Development with HAZLETT WEALTH MANAGEMENT, LLC, which is independent of Raymond James and is not a registered broker/dealer. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. All investing involves risk, including the possible loss of principal amount invested. No investing strategy, including asset allocation, diversification, rebalancing or dollar cost averaging, can guarantee your objectives will be met. Rebalancing a non-retirement account could be a taxable event that may increase your tax liability. 675 Sun Valley Road, Suite J1 + J2 Ketchum, Idaho 83340 208.726.0605. HazlettWealthManagement.com
