CPAlliance has some words of wisdom on the political environment. If your clients are nervous or just depressed, this might help. And if you'd like to work with them, the VIP Messenger is standing by.
I’m disappointed…at 11:59 on December 31st 2020 I hoped that the arrival of 2021 would bring in the new year and 2020 would be a distant memory. Now that we are here…sadly, I’m disappointed!
I’m disappointed that 2021 has a lot of the same issues as 2020. I’m disappointed that my New Year’s resolution has been broken. (Bye Bye Gym) More importantly, I’m disappointed that the Crimson Tide won the NCAA championship… YET AGAIN! (lol, Go Gators)
So…clearly nothing has changed in 2021. On January 20th a new president will take office at the White House. This makes roughly 50% of us happy, and 50% of us un-happy. The question is…Does. It. Financially. Matter?
As a former White House resident once said:
“Your success as a family, our success as a society, depends not on what happens in the White House, but on what happens inside your house.” – Barbara Bush
I could not agree more. Let me explain…
Control
When managing your personal finances, you can control two things:
- You decide to save money.
- You decide how to invest that money.
You have some control over:
- Your employment.
- How long you will work/live.
You have no control over:
- The Stock Market.
- Taxes, Social Security.
Key Takeaway: Focus on the things that you can control and have a plan for the things you can’t.
Consumer Confidence
When evaluating how well the economy has performed, it depends on who you ask. This chart shows the percentage of Republicans and Democrats who rate the national economic conditions as excellent or good.
It may come as no surprise, but…
- When a Republican holds the presidency, Republicans think the economy is doing well.
- When a Democrat hold the presidency, Democrats think the economy is doing well.
Key Takeaway: Remember that the fundamentals ultimately drive the economy. Opinions are just that…opinions.
At this point, you may be thinking, “But, Sterling! ‘My Team’ has done better for the economy! Correct?” Hmmmm… let’s take a look…
Past Economy Performance
Historically speaking the economy has performed well under both administrations.
This chart, shows different combinations of government control and how the S&P 500 performed under each scenario.
The details are provided for each scenario, but most importantly
ALL of the combinations are POSITIVE.
Key Takeaway: The US Economy has performed well under both administrations.
Does it Matter?
While you may, or may not, be happy with the results of the presidential election, you should remember that:
- The U.S. Economy is dependent on us, the consumer. Not the White House. Policy changes may have a short term impact on individual companies and industries. But, the long-term trends of the U.S economy will continue to drive us through 2021 and forward.
- Remember: 1) Focus on the things that you can control and have a plan for the things you can’t. 2) Fundamentals ultimately drive the economy. 3) Historically, the US Economy has performed well under both administrations.
- Stick to your financial plan. You are in it for the long game. You decide how much to save, and you decide where to put your savings. Finally, if you need some guidance, we are here to help.
Let us help you achieve financial independence!
